In Part 1 of this series, we explored the political philosophies that have long been adopted and promoted by Elon Musk and Peter Thiel and considered the implications, given both men’s obvious influence on the Trump administration. Musk is a high-profile advocate of Technocracy, and Peter Thiel is an accelerationist neoreactionary who favours, in particular, the Dark Enlightenment. Before you read this article (Part 2), I urge you to familiarise yourself with the explanations of Technocracy and the NRx (the neoreactionary movement) provided in Part 1. Otherwise, many of the references here will lack context.

As we noted in Part 1, Thiel and Musk are part of the oligarchic class by virtue of being invited to join a network led by other oligarchs whose stratospheric wealth far surpasses that of the names published on the “richest people in the world” lists. Welcomed into their exclusive club, Thiel and Musk are made men. In Part 2, we will explore how the political philosophies and the associated economic theories of Thiel and Musk are shaping public policy. Keep in mind that these two men are far from alone in attempting to create an American gov-corp Technate.

Libertarian Technocrats?

Although they borrow some libertarian ideas, there is nothing truly “libertarian” about either technocrats or accelerationist neoreactionaries. Their convoluted theories, once applied, could not be more authoritarian, more anti-liberty. Just as it is an oxymoron to describe Musk as a “libertarian technocrat,” so is it absurd to think of Peter Thiel as an “anarcho-capitalist.” Yet propagandists persist in encouraging us to see them in these terms. Witness a 2014 article in The Atlantic titled “The Libertarian Capitalist’s Case for State Power and Making No Money.”

It is possible that people like Thiel and Musk self-identify as libertarians because they think “liberty” means freedom granted by — and to — the oligarchy.

In Part 1, we referenced the Venetian Republic. The Doge of Venice was the ruler of the banking, finance, and commercial empire of the Venetian Republic. That is to say, the Doge was given the liberty to rule by the oligarchs of the day. We might wonder if the naming of the Department of Government Efficiency (the DOGE) that Musk leads deliberately references the Venetian magistrate. Some say it does, while others suggest another possibility. 

Created as a joke in 2013 by cryptographers Billy Markus and Jackson Palmer, the Dogecoin, a memecoin, has seen its price and market cap soar and fluctuate wildly thanks in no small measure to Elon Musk’s comments about it. Much of Musk’s talk about Dogecoin has been deliberately provocative. For example, in 2019 he declared himself the “former CEO of Dogecoin,” though that was never the case. His social media posts alone have provoked major changes in the price of Dogecoin. Musk has also aggressively hiked its value by, for instance, hinting it might become the basis of the proposed “X pay” payment system on his newly acquired ‘X’ platform — formerly Twitter. 

Musk encouraged bullish investment in Dogecoin. Of course, just because someone encourages you to do something that doesn’t negate your personal responsibility to conduct due diligence. When some investors lost their shirts, as Dogecoin prices tumbled, they tried to sue Musk in 2022 with a potential $258 billion class action lawsuit. The case was dismissed last year. The judge ruled that Musk’s comments were just “aspirational and puffery, not factual and susceptible to being falsified.” Though it is worth noting the offhand comments of one man took the Dogecoin from a literal joke — a crypto parody — to achieving a market capitalisation of $14.5 billion in 2021. 

If there is an in-joke to the naming of the DOGE, nominally led by Elon Musk, some argue it is Musk’s fondness for the Dogecoin that is reflected in the D.O.G.E acronym. Yet, the symbolism of “the Doge ”— one who is granted the liberty to rule by oligarchs — is perhaps more conspicuous. Just as with the term “Accelerator” — meaning high-impact investment to accelerate the growth of a startup — an obvious underpinning ideology is implied, even if rarely discussed.

In the introduction to his 2012 treatise, “The Dark Enlightenment,” political philosopher Nick Land highlighted the importance of an article written three years earlier by oligarch Thiel. 

Land wrote:

One milestone was the April 2009 discussion hosted at Cato Unbound among libertarian thinkers (including Patri Friedman and Peter Thiel) in which disillusionment with the direction and possibilities of democratic politics was expressed with unusual forthrightness. Thiel summarized the trend bluntly: “I no longer believe that freedom and democracy are compatible.”

In a related article Thiel penned, titled “The Education of a Libertarian,” he was describing himself, and yet the personal philosophy he outlined in it was pure accelerationist neoreactionism.  

Thiel opined that “the prospects for a libertarian politics appear grim indeed,” given that the government’s response to every crisis was “more government.” He also claimed that the post-WWI deflationary depression in Western nations was the last “sharp but short” shock to have allowed the alleged advantages of Schumpeterian “creative destruction” to flourish. After that depression, he said, so-called “democratic” politics had stifled the opportunities to capitalise on crises. As a result, Thiel said he no longer believed “that politics encompasses all possible futures of our world.” 

Asserting, in so many words, that democracies were useless, Thiel announced he had found a new life goal:

In our time, the great task for libertarians is to find an escape from politics in all its forms — from the totalitarian and fundamentalist catastrophes to the unthinking demos that guides so-called “social democracy.” The critical question then becomes one of means, of how to escape not via politics but beyond it.

For Thiel, the “unthinking demos” is us: the holders of the “neo-puritan faith” in progressive “social democracy” — the acolytes of the Cathedral (and the people whom Nick Land considers “inarticulate proles”). In Thiel’s view, we must embrace our “technoplastic” future, become intelligible, move beyond politics, and liberate capitalist innovation by swearing fealty to the gov-corp model. 

To this end, Thiel identified three “technological frontiers” upon which he could construct his darkly enlightened aristocracy.

[1] Cyberspace was the first frontier he identified. There, Thiel focused on creating “a new world currency, free from all government control and dilution.” Cyberspace would enable “new modes of dissent and new ways to form communities not bounded by historical nation-states” — and would result in a new world that would “force change on the existing social and political order.”  [2] Outer space would be another Thiel frontier, where the “libertarian future of classic science fiction” could be built.  [3] Seasteading would be his interim frontier, where the unclaimed oceans could be settled by humans. He called seasteading “more tentative than the Internet, but much more realistic than space travel.” Seasteading would at least give us the time to develop the outer-space ideas on earth, prior to colonising the stars.

These frontiers are necessary, Thiel insisted, because “we are in a deadly race between politics and technology.” He concluded: 

We do not know exactly how close this race is, but I suspect that it may be very close, even down to the wire. Unlike the world of politics, in the world of technology the choices of individuals may still be paramount. The fate of our world may depend on the effort of a single person [Trump?] who builds or propagates the machinery of freedom that makes the world safe for capitalism. [Emphasis added.]

Between 2006 and 2012, Thiel was instrumental in organising the Singularity Summits convened by the Machine Intelligence Research Institute — originally the Singularity Institute for Artificial Intelligence (SIAI) — in partnership with Stanford University. Thiel provided much of the funding.

Thiel cannot be both an advocate of accelerationist neoreaction and simultaneously an anarcho-capitalist — a libertarian. The two philosophies are mutually exclusive.

In Part 1, we noted the technocrats’ rejection of the notion that “all men are created equal.” In a similar vein, Land, Yarvin, Fisher, and other accelerationists consider it essential to have a ruling entity, which can only be comprised of a few human beings exercising an unequal, additional right to rule. Both the technocrats and the accelerationists fundamentally misunderstand, or misinterpret, what the Preamble to The Declaration of Independence means. They completely ignore the second clause of the relevant declaration — namely, “that they [human beings] are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.”

“Equality,” in real libertarian thinking, does not infer a held belief that everyone is the same — though that is certainly how technocrats interpret the word.

Libertarian “equality” doesn’t deny that people have relative strengths and weaknesses. It is not a rejection of either leadership or possible forms of meritocracy. It self-evidently means that every human being has an equal right to “Life, Liberty, and the pursuit of Happiness.” These rights are unalienable — or inalienable. Our rights are not decided for us by others or limited by others, and no one on earth has any more or any fewer “equal rights” than anyone else.

This idea is not difficult to grasp. It is central to the political philosophy of anarcho-capitalism, as clearly enunciated by Murray Rothbard (1926–1995):

[N]o man or group of men may aggress against the person or property of anyone else. This may be called the “nonaggression axiom.” “Aggression” is defined as the initiation of the use or threat of physical violence against the person or property of anyone else.

Anarcho-capitalism wholeheartedly rejects the initiation of the use of force — the aggressive imposition of claimed authority — by the state to coerce individual persons or seize their property. An example is the threat of fining or imprisoning someone who hasn’t paid taxes to the “proper” authorities. Anarcho-capitalism resoundingly rejects the state and all its dictatorial demands.

By contrast, the proponents of Technocracy and the proponents of the Dark Enlightenment, such as Musk and Thiel, are not interested in restricting state power, though they may say otherwise. Instead they wish to move the state from the public to the private sector and expand its power once sufficiently privatized. True, they oppose “representative democracy” and characterise it as both a “democracy” (which it isn’t) and a bureaucratic system riddled with problems (which it is), but the solutions they offer, to all intents and purposes, magnify the power of the very state they supposedly condemn.

What the believers in Technocracy and the believers in the Dark Enlightenment both propose are compartmentalised, hierarchical sociopolitical power structures that couldn’t be more state-like or more authoritarian. They seek to expand and maximise the power of the state, though in slightly different ways. Calling their new model of the state either a Technate (as technocrats do) or a gov-corp (as accelerationist neoreactionaries do) doesn’t change the nature of the tyrannical statism they desire to foist on the rest of us.

The Technopopulist Myth

The term “technopopulism,” coined by political theorists Christopher Bickerton and Carlo Accetti, has increasingly been bandied about. While the US voters who elected Trump were offered technopopulist promises, this was clearly a sales pitch to entice them to support a gov-corp Technate.

“Populism” can be broadly defined as a political attempt to “appeal to ordinary people who feel that their concerns are disregarded by established elite groups.” “Technocracy” is commonly said to mean “a government or social system that is controlled or influenced by experts in science or technology.”

Neither left-wing nor right-wing, technopopulism promises a new kind of politics based on the belief that the more limited role of elected politicians is to put the appropriate teams of experts together to guide policy and to find technological solutions to social and economic problems, thereby benefiting “ordinary people.” But the apparent technopopulist offer to retain democratic accountability in the US is a deceit.

The technopopulists say they want to unleash “technocracy” — with a small “t” — for the public good. But the new government system they propose is constructing “Technocracy” — with a big “T” — to serve the interests of the “American elites.”

This is evident from The Heritage Foundation’s Project 2025 (aka The 2025 Presidential Transition Project), Promise to America. It claims its purpose is to “defang and defund the woke culture warriors who have infiltrated every last institution in America.” While defanging and defunding woke warriors holds allure for American voters, the Project 2025 methodology actually subverts US “representative democracy.”

The Trump administration is evidently closely allied with Project 2025 — denials notwithstanding. One such obvious tie: Trump has nominated Russell Vought to return to the post of director of the Office of Management and Budget (OMB), and, by no coincidence, Vought was a key figure in convening the Project 2025 initiative. Project 2025 contributors were influential in Trump’s first administration and are no less conspicuous in his current picks for office.

Project 2025 sets a presidential agenda for the first 180 days in office that seeks to empower the executive branch to meet these key goals: dramatically reduce the size of the public sector bureaucracy; privatise and deregulate the functions of the state; and liberate American technological innovation by “shuttering” it off from the China tech sector’s alleged infiltration.

Thus, according to Project 2025, US technology can, if applied properly, be used to resolve all manner of social problems—from anti-American inequality of opportunity in the education system to woke propaganda infesting the media. In other words, American technology produced by Americans and for Americans can supply every long-sought answer to America’s ills. The power of American AI can be set free to, for example, police social media and tackle abuses such as Medicare fraud. Project 2025 offers the additional justification that the US is in an AI arms race with China and, therefore, must invest in AI accordingly.

Trump issued a slew of executive orders following his inauguration. These days, this is not an unusual practice for an incoming US president. However, Trump’s EOs were clearly heavily influenced by Project 2025.

Ironically, The Heritage Foundation and its Project 2025 are bankrolled by some of the “elites” the project accuses of betraying Americans. The Coors, Koch, Uihlein, Barre Seid, Bradley, and Scaiffe families are among the financial backers of both the Foundation and Project 2025.

Rather than technopopulists it is the “TechnoKings” (see Part 1) who have been “assisting” Trumps selection of his administration’s personnel. Musk’s influence is well known but Marc Andreessen, the venture capitalist co-founder of Andreessen Horowitz, is another influencer. Andreessen has not just been involved in making Trump’s picks for technology and economic related positions — areas where he perhaps has some expertise — but also for US defense and intelligence posts.

Andreessen’s Machiavellian reasons for supporting Trump are obvious. As reported by the Verge, in July 2024 Andreessen spelled out that he and his partners were backing Trump, not because they shared any of the concerns voiced by Republican voters, but because they could use the Trump administration to deliver the regulatory environment they wanted for their project to succeed.

That project is a gov-corp Technate. Not technopopulism but Techno-Optimism. 

In 2023, Marc Andreessen published The Techno-Optimist Manifesto. He explained precisely why he and his TechKing partners have seized their opportunity: 

We can advance to a far superior way of living, and of being. [. . .] We believe that there is no material problem – whether created by nature or by technology – that cannot be solved with more technology. [. . .] We have a problem of poverty, so we invent technology to create abundance. Give us a real world problem, and we can invent technology that will solve it. 

[. . .] Combine technology and markets and you get what Nick Land has termed the techno-capital machine, the engine of perpetual material creation, growth, and abundance.[. . .] We believe in accelerationism – the conscious and deliberate propulsion of technological development – to [. . .] ensure the techno-capital upward spiral continues forever. [. . .] 

We believe intelligence is in an upward spiral, [. . .] as people form symbiotic relationships with machines into new cybernetic systems. [. . .] We believe Artificial Intelligence is our alchemy, our Philosopher’s Stone. [. . .] We believe in Augmented Intelligence just as much as we believe in Artificial Intelligence. Intelligent machines augment intelligent humans, driving a geometric expansion of what humans can do. 

This is pure accelerationist neoreaction strongly influence by Technocracy. It is Nick Land and notably not Curtis Yarvin that Andreessen considers among the “Patron Saints” of Techno-Optimism.

People like Thiel, Andreessen, and Musk are serious. They want to implement the Dark Enlightenment and are hell-bent on establishing gov-corp Technates. Their oligarch network is indistinguishable from the Trump administration. Currently, the most powerful nation on earth is in their hands.

In true technopopulist fashion, it is perhaps Andreessen’s identification of gov-corp enemies that is most revealing: 

Our enemies are not bad people – but rather bad ideas. Our present society has been subjected to a mass demoralization campaign for six decades – against technology and against life – under varying names like “existential risk”, “sustainability”, “ESG”, “Sustainable Development Goals”, “social responsibility”, “stakeholder capitalism”, “Precautionary Principle”, “trust and safety”, “tech ethics”, “risk management”, “de-growth”, “the limits of growth”.This demoralization campaign is based on bad ideas of the past – zombie ideas, many derived from Communism, disastrous then and now.

The eradication of these “enemies” reads like an American voters’ wish-list. Ridding themselves of the globalist’s overreach exercised through institutions like the WHO, the WEF, the UN and even NATO, is what they seemingly voted for. Andreessen attempt to associate ideas like “sustainability,” “stakeholder capitalism” and even “social responsibility” with communism is, at best, wrong, but appears to be disingenuous and mere pandering. This is the Dark Enlightenment’s technopopulist sales pitch.

Escaping the grasp of the oligarchs was obviously a vote winner. But the American public has not escaped, on the contrary it has fallen into the clutches of the most authoritarian oligarchs imaginable. Oligarchs who, perhaps for the first time in history, not only have the political authority but the technology to make their gov-corp Technates a reality.

This is a clear and present danger to all of us. Not just Americans.

The same commitment to accelerationism and creative destruction is evident everywhere. In essence, gov-corp is the ultimate public-private partnership — a kind of inverted fascism where the private stakeholders use the claimed authority and violence of the state to achieve their goals.

The construction of Technates is not limited to the US. Arguably China, for example, is already operating a public-private Technocracy. What is happening under our noses is no libertarian dream realized. It is the construction of an all-cognizant, all-controlling, all-consuming global network of gov-corp Technates overseen by a bureaucracy of multiple poles.

On the surface, the new brand of technopopulist politics we’ve been examining seems to be anti-Establishment. At least, that’s how it’s being presented. It will use high-tech solutions and AI analysis to, for instance, deliver “lower taxes, much cheaper energy (green and fossil), faster growth and a productivity revolution.” Lest we forget, it will “make America great again” (MAGA).

The trouble with this pipe dream, though, is that the ostensible “technopopulists” and avowed neoreactionaries behind it are actually installing Big “T” Technocracy and gov-corp as their solution. Not MAGA, but “Dark MAGA.”

American Gov-Corp Technates

In 2020 Pronomos Capital, a venture capital firm backed by Peter Thiel, Marc Andreessen , and Coinbase established the low tax, low regulation nascent city state called Próspera on the island of Roatán in Honduras. The promotional blurb for Próspera read: 

Próspera is a startup city with a regulatory system designed for entrepreneurs to build better, cheaper, and faster than anywhere else in the world.

The current Honduras government considers Próspera’s claim to enjoy special economic and regulatory status illegal. The previous Honduras administration under Juan Orlando Hernández (JOH) — who was later convicted of drug smuggling in the US — initially created three so-called Zones for Employment and Economic Development (ZEDEs) of which Próspera is one. The initiative was fiercely opposed by the people of Honduras.

The ZEDEs create a “special regime” where investors — Pronomos Capital (Thiel, Andreessen, etc.) — have absolute control of “fiscal, security and conflict resolution policy.” For all intents and purposes, the ZEDEs are startup gov-corps.

In 2022, the incoming administration of Xiomara Castro Sarmiento started the process of repealing the ZEDE legislation. This is proving difficult because the Próspera ZEDE framework has a fifty year “built to last” clause in it guaranteeing the project for that period. Gov-corp investors instigated an $11 billion law suit to stop the Honduras government’s attempts to stymie their ambitions.

The technocrat oligarchs deployed the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) mechanism against the elected government of Honduras. It is not unreasonable to describe their action as a direct threat to bankrupt the entire nation. As we’ll discuss, these oligarchs are not “nice” people. Whether they call themselves Christian or not.

Many of the Próspera trademarks are held by NeWay Capital LLC, founded by Erick Brimen and Trey Goff. NeWay Capital formed the Freedom Cities Coalition (FCC) which is similarly backed by Pronomos Capital — Thiel, Andreessen, Coinbase et al. In 2023, Trump proposed establishing ten so called “Freedom Cities” in the US. The mainstream media focused on his comments about “flying cars,” but he was really talking about embryonic gov-corp Technates.

Reportedly, the FCC is now supposedly “in discussion” with the Trump administration to create gov-corp Technates across the US. Trey Goff said “the energy in DC is absolutely electric” and the ambition was to create “not just ten, but as many as the market can handle.”

If approved by Congress, these “startup nations” — neoreactionary realms — will be city states like Próspera. The FCC calls these “special districts” Prosperity Zones. The technopopulist offer is to unleash innovation, onshore employment opportunities and revitalise the American economy. The FCC objective is to “accelerate the development of new urban centers.”

Freedom Cities will operate in de facto US ZEDEs. The objective is to remove all regulation and allow tech-oligarchs the freedom to do whatever they like. These will be cities without limits, say the FCC and will be “zones of regulatory clarity and economic dynamism, [. . .] allowing entrepreneurs and builders to move at the speed of human ingenuity.”

The accelerationist neoreactionaries and the technocrats are racing ahead. As evidenced by Andreessen’s Techno-Optimist Manifesto, there is no doubt what they have in mind. 

In 2022, Balaji Srinivasan — former Andreessen Horowitz general partner and former chief technology officer for Coinbase — published his book The Network State: How to Start a New Country. In it, he outlined the neoreactionary strategy to “escape politics in all its forms” and enable tech-billionaire oligarchs to form their own sovereign states—sov-corps.

There is nothing pro-American about the NRx’s collective vision. Srinivasan wants the proposed “startup nations” to secede from the US and considers the US outdated and obsolescent.

Shortly we’ll discuss Trump’s peculiar and seemingly unilateral declaration that his administration is intent upon grabbing Greenland — and Gaza apparently. We are supposed to believe that it is Trump who wants Greenland (and perhaps Gaza); that Trump is the great strategist playing some sort of 5D geopolitical chess game. But it is Peter Thiel and his oligarch network that wants to build a gov-corp Technate called Praxis on Greenland. The people of Greenland should be wary. There is no legal limit to the “built to last” territorial expansion of Próspera and the TechnoKing oligarchs have the backing of the World Bank to make sure their project does last. 

A Humane Alternative to Genocide?

Following Trump’s inauguration, The New York Times published an adversarial interview with aforementioned political theorist of the neoreactionary movement (NRx) Curtis Yarvin.

Outlining Yarvin’s contention that the US should be run as a corporate monarchy (gov-corp) under the leadership of an all-powerful CEO (Trump), Times‘ writer and interviewer David Marchese formulated his arguments on the suspected racist aspects of Yarvin’s ideology.

The pair debated nothing of notable interest. The piece allowed Yarvin to forward some of his ideas to a wider public — but without disclosing any of their appalling implications. Meanwhile, the Times‘ Marchese posited a practically irrelevant counterargument.

The legacy media is not going to point out those appalling implications. But this is what Yarvin, the leader of the NRx admired by Peter Thiel and other neoreactionary oligarchs, had proposed in 2008 under his pen name, Mencius Moldburg:

Our goal, in short, is a humane alternative to genocide. That is: the ideal solution achieves the same result as mass murder (the removal of undesirable elements from society), but without any of the moral stigma. The best humane alternative to genocide I can think of is not to liquidate the wards [people]—either metaphorically or literally—but to virtualize them. A virtualized human is in permanent solitary confinement, waxed like a bee larva into a cell which is sealed except for emergencies. This would drive him insane, except that the cell contains an immersive virtual-reality interface which allows him to experience a rich, fulfilling life in a completely imaginary world.

The suspected racist streak in Yarvin does matter when we consider the implications of his gov-corp philosophy. But to imagine that identity politics provides any kind of intellectual basis to tackle the NRx dooms all such opposition to failure. If the objective is to resist accelerationist neoreaction, then harping on about the divisions between the progressive left and the right-wing — or “alt-right” — serves no useful purpose. Such arguments don’t even come close to comprehending what the Dark Enlightenment is. They only deflect the public from paying vital attention to real threats.

The Dark Enlightenment is not racist. It is anti-human race. Its advocates do not care what colour gov-corp’s customers are. They seek, rather, to transform all of humanity, to bring an end to what it is to be a sovereign human being.

Government Customers

Musk has already stated his desire to transform his X platform into a payment service provider and finance portal that, he hopes, could become “half of the world’s financial system.” Thanks in part to the headway made by Facebook’s Libra (Diem) project — more in this shortly — in 2023, Musk was able to start applying for the necessary regulatory approval for his financial domination project.

Via its “Digital State” — again, we’ll cover this in a moment — Ukrainians are the Digital State’s “customers.” Musk wants to X to form the basis of a worldwide Digital State in which all users will be customers.

Citizens as customers of government services is a key component of the gov-corp structure that neoreactionaries like Thiel and Andreessen desire. Just as we see the rise of the accompanying “accelerators” everywhere, so to the description of us as “customers” is seeping into the lexicon of governments the world over.

In 2019, the US multinational corporation IBM, whose operations make it the largest industrial research organization in the world and whose chequered history includes assisting the Nazis to perpetrate a holocaust, explained why we all need to consider ourselves the customers of our governments: 

Today’s society is changing at a record pace as companies worldwide develop innovative solutions designed to make the world a more efficient and sustainable place. [. . .] Apps provide us with personalized information based on geolocation; we can shop online from the comfort of our couch, and organize our finances on our smartphones.[. . .] [I]t’s time to rethink and reinvent public sector services, [. . .] a digital reinvention helps build trust in the public sector as a brand: the government has your back. [. . .] At IBM, we’re there to guide you through the current age of digital reinvention.

IBM, alongside CIA-linked Oracle, is a partner of the UK government’s Department of Work and Pensions (DWP) and is assisting it to “accelerate transformation” to a new digital DWP service. For its part, as it proceeds to make a £6 billion cut, the UK DWP has stopped winter fuel payments to pensioners and has committed to freezing and restricting access to disability payments to the disabled. It is effectively lowering unemployment benefits for the sick and disabled and tightening the eligibility criteria for nearly all state benefits. At the same time, the UK government is pushing through the Terminally-ill Adults (End of Life) Bill — commonly referred to as the Assisted Dying Bill — to make it easier for the state to kill people who just can’t take it any more. All of this, according to the DWP, is part of its drive to provide a better “customer experience.”

In 2021, The Biden administration issued Executive Order 14058 to improve the US federal government’s customer’s experience. Consequently, according to the US Department of Homeland Security (DHS):

[. . .] every person who pays taxes or uses Medicare is a customer of the federal government. Every veteran who uses a VA facility is a customer, every government employee that fills out their timesheet is a customer. The “customer experience” is how people experience and perceive our government services. It is what happens at the touchpoints when someone interacts with a government service. The customer experience can be a single touchpoint or several over a longer relationship between the “customer” and government. Each touchpoint is an opportunity for a positive interaction that adds up to a positive customer experience.

The mainstream media is avidly pushing the idea that politicians like Trump are in charge. But, not only does EO 14058 illustrate the clear shift towards NRx gov-corp aligned thinking, it also shows that the transformation is not dependent on whatever administration happens to be in office at the time. Gov-corp represents the underlying philosophy driving this governance reinvention. Technocracy is the operating system for the impending Technates, regardless of who you vote for.

The shift to digital money and “digital states” is key to the reimagining of society. Rather like the WeChat “everything app” in China, which operates as a public-private partnership between the government and Tencent — enabling the technocratic state to directly influence an estimated 1.3 billion Chinese customers –– the size of the X user-base gives Musk’s network an opportunity to construct his version of an everything app digital state. 

With an estimated 600 million users, Musk’s team is ready to launch his platform’s X-money payment system. It seems Musk doesn’t anticipate any regulatory problems, as another building block of the X-digital state is dropped into place. As X moves toward becoming a “comprehensive financial services hub,” working in partnership with Visa, the plan is to reportedly integrate digital currencies into the X-money system by the end of the year.  

The new interoperable global monetary system that is emerging has been designed to perpetuate the same old monetary game with the added benefit of AI surveillance and behavioural control. Investors can speculate — engaging in creative destruction — while protecting their digital finance empires by storing value in new digital reserve assets, almost certainly bitcoin. A so-called Synthetic Hegemonic Currency can and is being created, primarily using USD-denominated stablecoins underwritten by US debt. In contrast to the investor experience, it is unlikely to benefit many of its customers. 

Gov-Corp Technocrats Are Not “Nice” 

Contemplating new methods of genocide to rid yourself of whomever you find “undesirable” is something we associate with tyrannical megalomaniacs not egalitarian democratic “leaders.” Unfortunately, certainly in the US, it seems the maniac tyrants have the upper hand. 

As many Unlimited Hangout readers already know, Thiel received investment funds from the CIA’s In-Q-Tel to accelerate Palantir. Part of that arrangement was for Palantir to establish a public-private partnership that would rescue a US Defense Advanced Research Projects Agency (DARPA) project called Total Information Awareness (renamed the Terrorism-IA program in 2003). The purpose of the TIA was to create an all-pervasive US surveillance and population control system, with a heavy focus on pre-crime and other “predictive” interventions that would allow the state to justify any policy it chooses. 

The TIA project faltered when the US public learned of its intentions. State funding was officially withdrawn — which simply meant that the “less controversial” aspects continued under the guise of combating terrorism while the controversial projects went darker still. Ever since 9/11, “terrorism” has been the convenient PR buzz word for covering up a multitude of illegalities. The TIA program continued, unabated, to spy on the entire US population as a public-private partnership. 

Shortly after incorporating Palantir in 2003, Thiel and Palantir co-founder and CEO Alex Karp reportedly met with the TIA’s chief architect, John Poindexter. The pair apparently impressed upon Poindexter that they shared his vision of a US domestic digital gulag. Yet, unlike TIA, which had been housed at the Pentagon’s DARPA, they would develop the TIA system as a private entity. According to New York magazine, Thiel and Karp convinced Poindexter that Palantir would “pull together data collected by a wide range of spy agencies — everything from human intelligence and cell-phone calls to travel records and financial transactions.”

Evidently, In-Q-Tel’s seed funding followed soon thereafter. The CIA remained Palantir’s sole client until 2008. That is to say, Palantir enjoyed a monopoly due to its partnership with the state. 

Although Thiel’s cadre at PayPal — often called the PayPal Mafia — is supposedly responsible for ousting Musk from the company’s CEO spot, the rift between the two men seems somewhat overstated. Just as it is clear Musk hankers to install Technocracy, Thiel’s passion for the Dark Enlightenment is equally unambiguous. Both ideologies are mutually reinforcing. While there are some apparent tensions between Musk and Thiel, they are on the same path. Yarvin, for one, certainly values Musk’s contribution.

Thiel and Musk are already megarich magnates on the order of the robber barons of old. As such, their respective Dark Enlightenment and Technocracy dreams, when realized, are intended to make them “sovereigns” of what Yarvin calls a “patchwork of realms.”

The shared view of technocrats and neoreactionaries that society would be better if it were ruled by the likes of Musk and Thiel is an absurd and dangerous folly. We shouldn’t labour under any illusions that they’re nice.

Anduril Industries CEO Palmer Lucky is another Thiel protégé who, having sold his Oculus VR headset business to Mark Zuckerberg, moved into the war business with the help of Thiel’s venture capital firm, Founders Fund. Through Anduril, Thiel is investing in a defence technology that maximises AI’s ability to kill.

Peter Thiel and Elon Musk have both been instrumental in the development of AI. They combined forces in 2015 to accelerate Thiel protégé Sam Altman’s OpenAI as a “non-profit” research company. Today, propelled by the success of its ChatGPT generative AI chatbot, OpenAI is valued at around $160 billion. Consequently, its “for profit” subsidiary, OpenAI Global LLC, is poised to make fantastic profits.

OpenAI was pitched as a tool for developing AI to “benefit humanity as a whole.” Presumably, OpenAI’s defence contracts and its participation in the Silicon Valley consortium bid to dominate the US military-industrial complex reflect this principled commitment. Or perhaps the ethical stance of the team behind OpenAI is about as plausible as their “non-profit” pretensions.

There is every reason not to trust hypocrites like Thiel and Musk. One of those reasons is Palantir’s encroachment into national health-data systems, which is creating a virtual healthcare data monopoly in some countries — including the UK. This is extremely concerning, because it is obvious that patient care — or even basic human compassion — is not a priority for Thiel’s Palantir. There is nothing “Christian” about Thiel’s conduct. 

On the contrary, Palantir has actively participated in Israel’s Palestinian genocide and in the almost-complete destruction of the Palestinians’ healthcare system. In January 2024, Thiel and Palantir CEO Alex Karp agreed to a strategic partnership with the Israeli Ministry of Defense and signed a deal with the Israeli Occupation Forces (IOF) to “harness Palantir’s advanced technology in support of war-related missions.”

Of this deal the British Medical Journal observed: 

IOF operations have been described as a “war on hospitals” because of the systematic destruction of Gaza’s entire health system and 943 IOF attacks on healthcare. Hundreds of health workers have been detained, tortured, and killed. 

In addition to directly attacking healthcare, ongoing bombardment, forced displacement of Palestinians, and near complete siege of Gaza, the IOF has created a severe health and humanitarian crisis with high rates of malnutrition, infectious disease, famine, and dehydration.

Several Thiel-backed companies — Palantir (seed-funded by In-Q-Tel),Anduril and digital surveillance company Clearview AI — have all evidently used the Ukraine-Russia conflict as a test bed for their technology. As noted by Stavroula Pabst in her Unlimited Hangout article, “How Peter Thiel-Linked Tech is Fueling the Ukraine War,” these companies are “taking advantage of the conflict to develop controversial AI-driven weapons systems and facial recognition technologies, perhaps transforming both warfare and AI forever.”

Despite Thiel’s self-described libertarian and Christian beliefs, Pabst noted that the net impact of his venture capitalism couldn’t be more inhuman:

[T]hese Thiel-backed groups’ involvement in war serves to develop not only problematic and unpredictable weapons technologies and systems, but also apparently to advance and further interconnect a larger surveillance apparatus formed by Thiel and his elite allies’ collective efforts across the public and private sectors, which arguably amount to the entrenchment of a growing technocratic panopticon aimed at capturing public and private life. Within the context of Thiel’s growing domination over large swaths of the tech industry, apparent efforts to influence, bypass or otherwise undermine modern policymaking processes, and anti-democratic sentiments, Thiel-linked organizations’ activities in Ukraine can only signal a willingness to shape the course of current events and the affairs of sovereign nations alike.

Though Pabst’s piece was written in October 2023, her prescient observations have certainly been playing out. As we embark on 2025, it is clear that Thiel and Musk are among a troop of tech titans who have ingratiated themselves with the Trump administration.

While the war in Ukraine has evidently been used by the “TechnoKings” behind Trump to develop AI weapon systems, the Trump administration has hypocritically positioned itself as peace broker.

Replacing Representative Democracy

On their own, the ideologies of communitarianism, stakeholder capitalism, Technocracy, the Dark Enlightenment, and any other political ideology amount to little more than academic musings. Once implemented through the power and authority illegitimately claimed by the state, however, they couldn’t be more significant.

Thiel has heavily backed current Vice President JD Vance and other Republican political candidates, such as Blake Masters, who co-authored Zero to One: Notes on Startups, Or How to Build the Future with Thiel in 2014. There is a nexus of Thiel protégés surrounding the new Trump administration. It is hard to see how Vance could rise to what some call the second-most-powerful position in the US were it not for the career-long support he has received from Thiel.

As Thiel’s man, Vance’s admiration for the Dark Enlightenment is transparent. Adopting Yarvin’s “Retire All Government Employee” (RAGE) motto, which now seems to be embodied by the DOGE, Vance suggested that a future Trump administrator should “fire every single midlevel bureaucrat, every civil servant in the administrative state, [and] replace them with our people.”

In 2017, Buzzfeed published extracts from the dump of an email exchange between Curtis Yarvin and Milo Yiannopoulis. In one email, Yarvin revealed that he had watched the 2016 US election results with Thiel and said that Thiel was “fully enlightened, just plays it very carefully.” In his 2021 book, The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power, Bloomberg Technology writer Max Chafkin describes Yarvin as the “house political philosopher” of the “Thielverse,” according to a July 2024 article by Gil Duran in The New Republic.

Of course, Thiel does not want it widely known that he supports the Dark Enlightenment of the NRx. With its aim to destroy the political realm and replace it with a corporate monarchy, the Dark Enlightenment, if fully understood by the public, would outrage them and would be, for Thiel, a PR disaster. Despite the potential for that to happen, Yarvin’s ideas continue to influence him.

One such crazy notion was revealed by Yarvin in his talk at the March 2012 BIL Conference (an alternative to TED). Speaking as Mencius Moldbug, Yarvin advocated for gov-corp: 

There is no difference between a CEO and a dictator. If Americans want to change their government, they’re going to have to get over their dictator phobia.

Just a few weeks later, Thiel gave a lecture at Stanford, where he said:

A startup is basically structured as a monarchy. We don’t call it that, of course. That would seem weirdly outdated, and anything that’s not democracy makes people uncomfortable. We are biased toward the democratic-republican side of the spectrum. That’s what we’re used to from civics classes. But the truth is that startups and founders lean toward the dictatorial side because that structure works better for startups.

Ten days prior to Trump’s inauguration, Thiel used the Financial Times as an outlet to pontificate about the second-term President’s second-time promises to disclose details of the Kennedy assassination plot and to protect free speech, etc. Time will tell if these promises are kept.

In the same article, Thiel laid bare the lineage of his own philosophy:

Darker questions still emerge in these dusky final weeks of our interregnum. [. . .] The future demands fresh and strange ideas. New ideas might have saved the old regime, which barely acknowledged, let alone answered, our deepest questions — the causes of the 50-year slowdown in scientific and technological progress.

Certainly from 2009 onward, Thiel has viewed politics as a vehicle to promote his accelerationist NRx-aligned objectives. Not because he particularly shares the values of any political party, either Democrat or Republican — or, for that matter, Libertarian — but because he recognises that people are programmed to feel comfortable as long as they believe whatever they support has something to do with “democracy.” Remember, Thiel calls us the “unthinking demos.”

In 2014, reporting the evidence of some of the other links between Yarvin and Thiel, Corey Pein, writing for The Baffler, accurately lumped Thiel in with the NRx and called them collectively a bunch of “mouthbreathing Machiavellis.”

Responding to Pein’s piece, Thiel said, according to an article published shortly thereafter in The New York Times:

Actually, I found that vaguely flattering. [. . .] It was the full-on conspiracy theory. In truth, there’s nobody sitting around plotting the future, though sometimes I think it would be better if people were.

This was blatant baloney. Thiel well knows there are people “sitting around plotting the future.” He himself maintains a web of connections with the plotters of which he speaks — and is obviously one of them.

Thiel, as President of Thiel Capital, sits on the Bilderberg Steering Committee. The steering committee sets the agenda for the secretive Bilderberg Meetings where around 130 selected globalist delegates debate policy initiatives behind closed doors. Palantir CEO, Thiel’s associate Alex Karp, is also on the steering committee, as is former chair and CEO of Google Eric Schmidt and the President of the World Economic Forum (WEF) Børge Brende. Consequently, it isn’t surprising that the main topic for debate at the last 2024 Bilderberg meeting was Artificial Intelligence (AI).

Former NATO Secretary General Jens Stoltenberg has been selected as the chair for the next Bilderberg Meeting and will also serve as chair of the next Munich Security Conference (MSC). The UK Guardian reports that his appointment marks a moment where the “influential” Bilderberg group is contributing toward the “concentration of control at the top of the Atlantic alliance.” Noting that Bilderberg brings together “prime minsters, EU commissioners, bank bosses, corporate CEOs and intelligence chiefs,” it was ridiculous for Thiel — a senior Bilderberger — to feign ignorance of those who evidently are “plotting the future.”

Yarvin, in the earlier-referenced interview with David Marchese in The New York Times, was asked what he meant when he said Thiel was “fully enlightened”:

Fully enlightened for me means fully disenchanted. [. . .] It’s a disenchantment from believing in these old systems. And the thing that should replace that disenchantment is not, Oh, we need to do things Curtis’s [or Peter’s] way. It’s basically just a greater openness of mind.

Sure, the Dark Enlightenment rejects the “old systems” — i.e., representative democracy — but Yarvin’s diplomatic response cannot hide the fact that Thiel and other members of the NRx evidently know what they want to replace it with: gov-corp overseeing a network of sovcorp-managed functional sequences in a Technate instead of within existing nation-states.

The US Satellite Gov-Corp Technate In Ukraine

While the war in Ukraine has evidently been used by the “TechnoKings” behind Trump to develop AI weapon systems, the Trump administration has hypocritically positioned itself as peace broker. Obviously, any sane person would welcome the end of hostilities, but there is a clear subtext to the US policy shift.

The Trump administration has emphasised the US potential deal with Ukraine to access Ukraine’s possible rare earth metal deposits as a “win” for US voters. He told the US public that there were “$500B worth of rare earth” in Ukraine. This is highly speculative.

While Ukraine certainly has a lot of coal, oil, gas and uranium, much if that is in territory currently occupied by the Russian Federation. The estimates of rare earth metal deposits in extant Ukrainian territory were made around half a century ago and some, such as independent energy and mining consultant Tony Mariano, have significant doubts about the commercial viability or even the presence of the alleged deposits:

As far as I know, there are no economically viable rare earth deposits in Ukraine. I have evaluated clay deposits that I thought had potential, but I found that they are not viable. This does not mean that there are none, but that more exploration and evaluation is needed.

With regard to the minerals deposits that are known to exist in Russia’s “new territories,” including any possible if unlikely rare-earth deposits, Russian president Vladimir Putin has indicated his willingness to collaborate with the US again. In the spirit of public-private partnership (stakeholder capitalism), Putin told journalist Pavel Zarubin that Russia was ready “to offer [cooperation] to our American partners – when I say partners, I mean not only administrative and government structures, but also companies.”

While Russians and Ukrainians continued to die, Kirill Dmitriev, former Goldman Sachs, McKinsey & Company and WEF investment guru, and the current CEO of the Russian Direct Investment Fund — appointed in 2023 by Putin as special representative of the Russian president for investment — said that US energy corporations would welcome “access to Russian natural resources.”

In 2014, the US enabled and supported Ukrainian Nazis (the Right Sector and others) to orchestrate the violent Euromaidan Coup that overthrew the elected president Victor Yanukovich. Ukrainian Nazi atrocities in Odessa and Mariupol immediately followed and marked the start of an eight-year-long war that Russian forces officially entered in 2022.

From the moment Russia began its so-called “special military operation” in Ukraine, the US response was focused on seizing economic, financial and resource control of Ukraine in exchange for bolstering its military. It is not unreasonable to observe that Russian intervention enabled the US public-private partnership to capture Ukraine. With the Russian government now looking forward to working with its US partners, and given that the US state was instrumental in instigating the current conflict, one has to wonder what this war has really been about.

Large US corporations, such as Microsoft and Amazon, began the process of digitising the Ukrainian government on February 24^th 2022, the day Russia is said to have “invaded” Ukraine. This process has since seen Ukraine become a world leader in “digital democracy.” Ukrainian citizens are being coerced towards accepting digital ID, digital payments and into total reliance on digital infrastructure for many of their everyday needs. This has been met with great enthusiasm from globalist think tanks, such as The Centre for International Governance Innovation.

As Ukrainian energy and technological infrastructure became more reliant on US corporations, global investors — through the asset management giant BlackRock — agreed to deals with the Ukrainian government to “structure the nation’s reconstruction funds.” 

In November 2022 BlackRock announced: 

BlackRock FMA [Financial Markets Advisory] will advise the MoE [Ukraine Ministry of Economy] on establishing a roadmap for the investment framework’s implementation, including identifying design choices for the envisioned setup, structure, mandate and governance. The MoU [Memorandum of Understanding] formalizes the discussions the President of Ukraine, Volodymyr Zelenskyy, and the Chairman and CEO of BlackRock, Larry Fink, held in September on the possibilities of driving public and private investments into Ukraine.

The WEF arranged further meetings between Zelensky’s administration and JPMorgan CEO Jamie Dimon alongside a consortium of investors represented by executives from BlackRock, Bridgewater Associates, Carlyle Group, Blackstone, Dell, ArcelorMittal, and others. With the financial architecture in place, and US and other multinational corporations set to capitalise, the emphasis shifted in early 2024 towards reducing the investment risk.

War is the preferred business model for private military contractors (PMCs – mercenaries), or International Defense Companies (IDCs) as they are called in Ukraine. With Ukrainian government legislation in the pipeline to legalise IDCs operating in post-war Ukraine — coinciding with the Pentagon’s decision to ease restrictions supposedly placed on US PMCs (IDCs) working in Ukraine — US PMCs are just one corner of the US military industrial complex set to exploit the thirty-five-fold increase in the Ukrainian defence market created by Russia’s “invasion.” This is yet another tantalising Ukraine war opportunity for multinational financiers, such as BlackRock’s investors for example.

Obviously, a “post-war” Ukraine is needed to turn these investment opportunities into solid ventures. With the US public-private stakeholder invasion of Ukraine complete, and the Russian public-private stakeholders ready to do business, Ukraine finds itself in a precarious position. It is almost completely in the hands of US corporations.

For example, Ukraine is now heavily reliant on Musk’s Starlink for its internet connectivity and other communication systems. Indeed Ukraine’s “digital democracy” is now largely controlled by oligarchs like Musk.

The Ukrainian Diia app is the product of a joint project between the CIA front organisation USAID and the Ukrainian Ministry of Digital Transformation which named Diia the literal Digital State. Diia is an “everything app.” It ties Ukrainian citizens to a centralised digital control system (Diia) through which they access government services. Their digital IDs and digital passports, driving licenses, fine levies and payments, their tax returns, tax accounts, their mRNA vaccine certificates and more can all be overseen by the Digital State.

Of course, the overwhelming priority is to end the war. From a humanitarian perspective, at this point, nothing could be more important. Trump will almost certainly be credited if his apparent diplomacy succeeds and this will surely be perceived as more evidence of his great leadership by his supporters.

We are supposed to believe that the Ukraine government’s stalling over Trump’s deal for US corporations’ access to Ukrainian rare earth deposits is the reason why the US has reportedly threatened to cut off Ukraine’s Starlink connectivity. The privatisation of a state like Ukraine couldn’t be more dangerous for its people. Musk was quick to point out that he could personally end Ukraine’s war effort, claiming the Ukrainian military’s “entire front line would collapse if I turned it off.” He later added this is something he would not do. Though obviously, given the Dogecoin debacle, Musk’s team fully comprehend the impact his comments have.

In truth, there is a vast network of international investors looking at a post-war Ukraine with avarice. The rare earth deal is a sideshow to keep the public bemused. The whole nation state of Ukraine is ripe for the picking and the transition to a US satellite gov-corp Technate is already well underway.

The New World Currency

As previously noted, one of Peter Thiel’s long-term ambitions has been to create “a new world currency.” Fortuitously, one of Trump’s first executive orders was aimed at strengthening US leadership in digital financial technology. In it, he promised his voter base that he would prohibit “the establishment, issuance, circulation, and use of a CBDC [Central Bank Digital Currency] within the jurisdiction of the United States.”

But there is a caveat: The order “shall be implemented consistent with applicable law.” As we know, legislative “laws” are subject to change at any time.

Trump included in this EO a US government commitment to promote and protect “the sovereignty of the United States dollar, including through actions to promote the development and growth of lawful and legitimate dollar-backed stablecoins worldwide.” [Emphasis added.]

As extensively reported in the four-part investigative series on the cryptocurrency industry published last November by Unlimited Hangout writers Whitney Webb and Mark Goodwin, rather than averting the societal risks associated with CBDC, Trump’s January 23^rd executive order arguably portends something far worse.

As Webb and Goodwin pointed out:

[T]he policy of the Federal Reserve since last year has made it clear that they favor “private stablecoin issuance rather than official CBDC issuance.” With stablecoins being just as programmable and surveillable as CBDCs, and some stablecoin issuers like Tether already allied with U.S. intelligence and security agencies, the current stablecoin bill is poised to pave the way for the U.S.’ de facto CBDC and to ensure that Wall Street and well-established titans of digital finance like PayPal have the advantage.

In particular, Thiel, PayPal, Facebook (now Meta), and US financial regulators have, for some time, been preparing for “a new world currency.” In order to understand the process they have been setting up, we first need to consider how this public-private partnership has apparently shaped the financial regulatory framework in the US.

Thiel emphasised the “new world currency” idea in his aforementioned 2009 article, “The Education of a Libertarian” (the piece, you may remember, that influenced Nick Land’s conceptualisation of the Dark Enlightenment). In that piece, he wrote:

[T]he founding vision of PayPal centered on the creation of a new world currency, free from all government control and dilution — the end of monetary sovereignty, as it were. In the 2000s, companies like Facebook create the space for new modes of dissent and new ways to form communities not bounded by historical nation-states. By starting a new Internet business, an entrepreneur may create a new world. The hope of the Internet is that these new worlds will impact and force change on the existing social and political order.

Peter Thiel sat on the Meta (Facebook) board of directors until 2022, when he left to reportedly “focus on political endeavours.” Upon his departure, Meta CEO Mark Zuckerberg offered his personal gratitude to Thiel for “teaching me so many lessons about business, economics, and the world.”

In 2019, under Thiel’s evident influence, Facebook announced its intention to launch a stablecoin payment system called Libra, which it soon renamed Diem. The project was co-headed by David A. Marcus, who moved to Facebook from PayPal in 2014, and by Morgan Beller, who migrated from the venture capital firm Andreessen Horowitz.

Libra appears to have failed. But, as Whitney Webb and Mark Goodwin explain, that interpretation depends upon what one views the purpose of Libra (Diem) to have actually been.

With an estimated two billion-plus Facebook users worldwide, if Libra had succeeded, it would have represented the potential “end of monetary sovereignty” as far as central banks were concerned. Apparently, the mere announcement of Libra’s proposition sent financial regulators into an tailspin. The unregulated issuance of “money” couldn’t be allowed to happen! Hence, Zuckerberg had to be seen being quizzed by pretty much the entire global financial and political “elite.”

The Synthetic Hegemonic Currency (SHC)

In May 2019, Thiel protégé Sam Altman wrote a blog post in which he said:

Although I don’t think the US government can stop cryptocurrency, I do think it could create the winner — let’s call it “USDC” for US Digital Currency — and fix some challenges that governments currently face with cryptocurrency. I think the first superpower government to do something like this will have an enviable position in the future of the world, and some power over a worldwide currency.

In August 2019, at the G7 central bankers symposium in Jackson Hole, Wyoming, the main topic of discussion was what the Bank of England’s then-Governor Mark Carney called a growing “destabilising asymmetry at the heart of the IMFS” [International Monetary and Financial System].

Carney told the gathered bankers and financiers that the “world economy was being reordered.” He said that the US dollar remained “important” in the short term but that “the game” must change to suit a “multipolar world.” Therefore, “the global reserve currency”—the US dollar (USD) — needed to transform into some sort of “Synthetic Hegemonic Currency” (SHC).

Carney added:

While the likelihood of a multipolar IMFS might seem distant at present, technological developments provide the potential for such a world to emerge. Such a platform would be based on the virtual rather than the physical. [. . .] 

Technology has the potential to disrupt the network externalities that prevent the incumbent global reserve currency [the USD] from being displaced. [. . .] 

The most high-profile of these has been Libra—a new payments infrastructure based on an international stablecoin fully backed by reserve assets in a basket of currencies including the US dollar, the euro, and sterling. [. . .] 

The Bank of England and other regulators have been clear [. . .] the terms of engagement for any new systemic private payments system must be in force well in advance of any launch. As a consequence, it is an open question whether such a new Synthetic Hegemonic Currency (SHC) would be best provided by the public sector, perhaps through a network of central bank digital currencies. [. . .] 

Even if the initial variants of the idea prove wanting, the concept is intriguing. It is worth considering how an SHC in the IMFS could support better global outcomes, given the scale of the challenges of the current IMFS and the risks in transition to a new hegemonic reserve currency like the Renminbi.

So, here is Carney saying that the Libra stablecoin raised the “intriguing” possibility of creating a new SHC “backed by reserve assets” but that Libra itself was “wanting” due to the lack of clear “terms of engagement.” However, if the requisite regulatory “terms of engagement” were “in force well in advance of any launch,” Carney raised the potential to create an SHC using Libra-like stablecoins. This, he proposed, could stave off challenges from new possible hegemonic reserve currency alternatives, such as China’s Renminbi, and create a USD SHC suitable for a “multipolar IMFS.”

A month after Jackson Hole, in September 2019, Zuckerberg met with lawmakers on Capitol Hill to discuss “future internet regulation.” He was also invited to the White House for a “surprise” meeting.

Then, in October, Zuckerberg testified before the House Financial Services Committee about the aforementioned Libra (Diem) and was invited again to the White House — this time for dinner and this time accompanied by then Facebook board member Peter Thiel. The Trump administration didn’t think it necessary to disclose what was discussed, according to an NBC News report.

Immediately thereafter, Zuckerberg’s Libra project began to shift away from a stablecoin based on “a basket of currencies,” and by 2020 it was more closely aligned with the USD. The Financial Times reported in late November 2021 that Libra would initially launch as “a single coin backed one-for-one by the dollar.”

Webb and Goodwin speculate, with good reason, that the whole point of Facebook’s purportedly aggressive pursuit of Libra (Diem) was not so much about the stablecoin itself but rather about creating a threat that would appear to warrant regulatory change. It appears the team behind Libra always anticipated the failure of Libra and the resultant formation of a regulatory framework for a potential USD Synthetic Hegemonic Currency.

Going back to July 2019, two months before the Jackson Hole symposium, Facebook stated in an SEC filing:

Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue. [. . .] These laws and regulations, as well as any associated inquiries or investigations, may delay or impede the launch of the Libra currency. [. . .] As such, there can be no assurance that Libra or our associated products and services will be made available in a timely manner, or at all.

The fact that Facebook (now Meta) knew Libra might fail and was counting on new regulations that would open new digital financial markets could cause careful observers to conclude that Zuckerberg’s Libra project was intended to be an embodiment of “creative destruction.”

While the Libra (Diem) stablecoin didn’t make it, the stablecoin market as a whole has done quite well, if one measures by market capitalization. The leading stablecoins are Tether’s USDT ($140 billion), Circle’s USDC ($44 billion), and the Ethereum blockchain-based “decentralised” DAI ($3 billion). Then we have FD121 Ltd.’s FDUSD ($1.8 billion) and USDD ($750 million), initially issued on the TRON blockchain.

PayPal stablecoin PYUSD, issued by the Paxos Trust Company and currently at $480 million market cap, stands apart because Paxos is a fully regulated US custodian. What’s more, PYUSD is perhaps the most firmly 1:1 USD-pegged stablecoin, backed as it is with a mix of USD deposits, short-term US Treasurys, and cash equivalents.

When the Nixon administration closed the gold window in 1971, ending the monetary system formulated at Bretton Woods in 1944, the USD became fully disassociated from any real intrinsic value (gold), though fractional reserve banking had already practically relinquished the dollar-and-gold association. The subsequent fiat currency monetary system has led to an enormous expansion of the money supply and ballooning of global debt. Those inevitabilities ultimately caused what Carney described as the “destabilising asymmetry at the heart of the IMFS.”

Carney recognised that the world’s leading holders of US debt were Japan and China. Both countries have been accelerating the process of dumping US Treasury securities (government bonds). Their bond market moves further threaten the dominance of the US dollar as the world’s reserve currency. Now Trump has come to the White House with a fiscal policy package promising low domestic taxes and higher international trade tariffs at the very time that his country’s “exorbitant privilege” — the US economic advantage gained by funding its own deficit by issuing the reserve currency every other nation needs to buy — is receding. 

US public spending is fuelled by borrowing — by issuing government bonds. The traditional monetary view would suggest that the only option available to the US is to massively inflate the money supply — again! But, with its staggering $36 trillion national debt, and with other national governments increasingly unwilling to buy that debt (creating a lower demand), US borrowing costs seem set to rise and exacerbate the mounting debt problem.

Bluntly put, the US dollar and the US economy would appear to be screwed. Unless, of course, the US can find some other outlet to absorb its debt. If it can, there’s no reason why the monetary Ponzi scheme can’t carry on. Obviously, it will continue to have a terrible impact on people around the world, especially the poorest — including the poorest Americans. But when have rapacious oligarchs ever cared about social deprivation?

The total supply of stablecoins has now eclipsed $200 billion. In the US, Tether is currently the third-largest buyer of US 3-month Treasuries and the 16^th-largest purchaser of US government bonds globally. Because they absorb US debt, stablecoins are seen as the key to stabilising US interest rates. The proposed Clarity for Payment Stablecoins Act has led some to suggest that it might become a regulatory requirement for USD-denominated digital tokens (stablecoins) to back their coins with nothing but US Treasury bills. If so, under Paxos’ custody, PYUSD is already well-placed to take advantage.

The bitcoin (BTC) hard cap, embedded in its code, ensures that no more that 21 million BTC can ever be “mined” (that is, issued). Every four years “halving” occurs, thereby theoretically reducing bitcoin issuance. This is the polar opposite of the fiat monetary system, in which the money supply can, realistically, only expand. The resulting inflation persistently devalues fiat currency. Bitcoin, however, is inherently deflationary. It is a tempting store of value for oligarchs who have treated the fiat currency system as if it were their own fiefdom to control and have run it into the ground.

Currently the top 21 holders of bitcoin collectively possess 2.3 million BTC, representing around 11% of the total bitcoin supply. At today’s prices, that is the equivalent of $236 billion in BTC holdings.

The presumably pseudonymous Satoshi Nakamoto, author (or authors) of the original bitcoin white paper and possessor of perhaps as much as 1.1 million BTC, is officially the 19th wealthiest individual on the planet, worth around $91 billion. He may not be an individual but a collection of bitcoin founders. Some believe the name was made up by intelligence officials who could be behind the creation of bitcoin.

MicroStrategy, which provides business intelligence and mobile software services and whose leading shareholders are Capital Group, Vanguard, Morgan Stanley, and BlackRock, is the second-largest holder of bitcoin after Nakamoto. The third largest are the combined governments of the US and the UK, which reportedly hold $19 billion and $6 billion of bitcoin, respectively. Block.one — backed by Thiel — is the fourth largest, with more than $15 billion. The fifth-largest holder is Tether, owner of the USDT stablecoin, which has $8 billion and is the world’s largest trader of cryptocurrency. Tether has committed to investing 15% of its annual profits in bitcoin.

MicroStrategy founder and Executive Chairman Michael Saylor, grilled last March by Yahoo Finance, called BTC “the most valuable asset in the world” and “the endgame for anybody that wants to own the greatest property in the 21^st century.” And, according to a blurb last October by Forbes senior contributor Billy Bambrough, who has the magazine’s bitcoin and blockchain beat, “Saylor has revealed [MicroStrategy’s] endgame [. .  .] to become a bitcoin investment bank—and to buy up to $150 billion of bitcoin.”

MicroStrategy investors are presumably eager to see that bid succeed. They’re aware, as is Saylor, that being bullish on bitcoin further stimulates demand for BTC and brings “the endgame” closer.

BlackRock apparently agrees. The multinational investment company has seen its global asset portfolio increase to approximately $11 trillion, thanks in no small measure to its pivot toward digital currencies. Hitherto cool on cryptocurrencies, as other large investment houses have been, BlackRock now considers bitcoin in particular to be a digital asset. “We believe,” said CEO Larry Fink last October, that “bitcoin is [an] asset class in itself, an alternative to other commodities like gold.” Also, BlackRock is now among those advocating digitizing the dollar.

Trump’s executive order establishing the Presidential Working Group on Digital Asset Markets has tasked that group with developing “a Federal regulatory framework governing digital assets, including stablecoins, and evaluating the creation of a strategic national digital assets stockpile.” 

Simultaneously, the trajectory toward setting bitcoin as the “new gold alternative” is well underway. Notably, the Swiss government has already started the formal process of amending Article 99 of the Swiss Federal Constitution to allow the Swiss National Bank (SNB) to hold BTC reserves.

“On-ramps” are payment services that allow users to exchange fiat currency for digital assets like stablecoins. “Off-ramp” services allow users to convert digital assets back into fiat currencies. Using stablecoins, pegged 1:1 to the USD, greatly simplifies the process if you want dollars. That said, in a “multipolar IMFS,” Chinese and Japanese customers, for example, might not want USDs. Advances in decentralized finance technology (DeFi) are homogenizing global currencies. An effective SHC, with the USD set to dominate, is rapidly approaching.

Circle’s Cross-Chain Transfer Protocol (CCTP) facilitates cross-border payment in USDC. This is fine if you want to off-ramp into fiat USDs, but if you want Euros, you still need to deal with the USD-Euro exchange rate (market price). This additional exchange reduces speed and increases the cost of the transaction (gas fees), thereby limiting scalability to non-USD customers.

Decentralized exchanges (DEXs), such as Uniswap, make use of Automated Market Maker (AMM) DeFi. This better enables cross-border transactions between stablecoins backed by different fiat currencies. Cross-chain interoperability protocols facilitate communication and data-sharing between different blockchains. Combined with AMM advances, cross-border stablecoin transactions are consistently becoming faster and cheaper.

Circle’s EURC is a Euro-backed stablecoin fully compliant with the European Union’s Markets in Crypto-Assets Regulation (MiCA). In 2024, researchers from Warwick Business School on-ramped in USD (USDC) and off-ramped in Euros (EURC) using Circle’s AMM.

The researchers reported:

Given that EURC is pegged to the Euro and USDC to the US dollar, trading in the EURC/USDC market should closely track developments in the traditional EUR/USD market. Indeed, we found that the blockchain market operates efficiently, with EURC/USDC prices staying within 20 basis points — or 0.2 percentage points — of traditional EUR/USD market prices. Furthermore, blockchain prices responded to macroeconomic information, such as interest rate announcements from the US Federal Reserve.

The USD-backed stablecoins have primacy, and a USD-denominated SHC seems by far the most likely outcome. That said, some experts, such as former Binance.US CEO and 1Money founder Brian Shroder, predict a multicurrency stablecoin future. In a recent interview with CoinTelegraph, Shroder said, “We envision a global network powered by stablecoins representing all major currencies.”

Equally, if interoperability protocols and AMM DeFi development continue to accelerate, such a multicurrency system is still likely to protect the USD. Those pushing USD dominance, such as the Thiel-led consortium behind the Global Dollar Network’s USDG stablecoin, with its proposed cross-chain interoperability, evidently have the edge.

The Bank for International Settlements (BIS) Committee on Payments and Market Infrastructures (CPMI) runs The Taskforce on Cross-border Payments Interoperability and Extension (PIE Taskforce). The committee was formed in response to the G20 Roadmap for Enhancing Cross-border Payments (established in 2020 with the final stage three report published in 2023 — hereafter referred to as the G20 Roadmap), which, the BIS notes, seeks to enhance “cross-border payments’ speed and transparency, while increasing access to cross-border payment services and reducing their costs.”

The G20 — short for Group of 20 — is an international forum comprised of 19 member states (including the US, the UK, Russia, China, and India) plus the European Union (EU) and the African Union (AU). Formed in 1999, it is structured as a multipolar global forum of five internal groups with the aim of coordinating economic policy. The finance ministers and central bank governors of the respective G20 member states and of the EU and AU dominate G20 deliberations.

An important contributor to the G20-and-BIS-aligned CPMI-PIE taskforce is Coinbase, which was accelerated into existence by Y-Combinator (see Part 1). Coinbase responded to the recent PIE consultation by making the point that all the G20 Roadmap targets could be met by properly regulated stablecoins. Coinbase observed that “a mixed-payments ecosystem” that supports “traditional bank rails and wholesale payments” can benefit from stablecoin adoption.

The global digital ID network is being created from a range of “interoperable” but “vendor-agnostic” digital ID products. There won’t be just one global digital ID card or biometric ID product—such as a single facial recognition system. Instead, all such products and systems will export data using an agreed-upon machine-readable format. In the case of digital ID products and systems, they will comply with ISO/IEC 19794 Series and ISO/IEC 19785 biometric data interchange formats.

Thus, it is entirely possible that a single global database, perhaps the World Bank’s ID4D or some similar global solution, could collect data from all the interoperable vendor-agnostic digital ID products and systems worldwide. The ID4D project is supporting the introduction of global interoperability standards that will be “capable of facilitating transactions in the digital age.”

The International Organization for Standardization, abbreviated as ISO (not IOS), has an international standard for electronic data interchange between financial institutions. This standard, called “ISO 20022,” is explained as: 

[. . .] a global messaging standard designed to improve communication between financial institutions through structured, machine-readable messages. [. . .] ISO 20022 facilities interoperability and efficiency across payment systems, securities markets, and other financial domains. Its rich data fields and extensibility make it a cornerstone for modernizing global financial infrastructure.

It goes without saying that the BIS — specifically its Committee on Payments and Market Infrastructures (CPMI) — is eager to embrace the ISO’s “payments data harmonisation,” which it announced last month. As noted by CentralBank.com, “A key factor in achieving more efficient cross-border payments is the use of the same data standards by all countries, and the ISO 20022.” 

ISO 20022-compliant stablecoins and underlying blockchains are emerging, according to a December 2024 article in CryptoNews.com. This innovation is being propelled by the multipolar G20 Roadmap and raises the potential of establishing a global “unified ledger” — or “shared ledger” — that effectively oversees every digital financial transaction on earth.

In 2024, the Society for Worldwide Interbank Financial Telecommunication, recognizable by its acronym, SWIFT, reported:

The concept of a new, universal shared ledger for digital payments and assets is gaining interest as a way of transforming how transactions are recorded and settled. [. . .] In its Annual Economic Report 2023, the BIS presented its blueprint for a future monetary system, envisaging a new type of financial market infrastructure—a “unified ledger”—which could “capture the full benefits of tokenisation.” [. . .] [T]he shared ledger model could potentially help to improve the cost, speed, predictability and accessibility of cross-border payments — thereby supporting the G20 roadmap. [. . .] [A]n ISO 20022-based messaging layer will enhance the shared ledger proposition.

A Synthetic Hegemonic Currency (SHC) is being constructed, but, like its global digital ID counterpart, it is very unlikely to be one stablecoin or one digital asset or token. Rather, as Coinbase developers put it, the SHC will be a “mixed-payments ecosystem.”

The SHC is going to be an interoperable network of “vendor-agnostic” digital tokens. Stablecoins are accelerating the SHC’s development. Interoperability, enabled by machine-readable data harmonisation, will revolutionise business-to-business (B2B) transactions.

The race is on to seize control of the “new world” of regulated stablecoins. Peter Thiel and his protégés, working in partnership with Musk and others, have established a global network of tech and tech-finance companies that have been key drivers in creating a “new world currency.” That we find ourselves where we are today is no accident.

The Public-Private SHC Surveillance State

In 2023, Tether’s new CEO, Paolo Ardoino, was under investigation by the US Senate Committee on Banking, Housing, and Urban Affairs for potential sanction-busting financial activity. He submitted a letter to the committee in which he reported yet more evidence of the close relationship between leading players in the financial technology (FinTech) development community and the US defence-and-intelligence complex.

Ardoino wrote:

On December 1, 2023, we launched a wallet-freezing policy designed to significantly enhance the tools available for law enforcement agencies seeking to combat illicit use of stablecoins. [. . .] Tether recently onboarded the United States Secret Service into our platform and is in the process of doing the same with the Federal Bureau of Investigation (FBI). These strategic relationships reinforce our commitment to supporting law enforcement. [. . .] We have assisted in freezing, as of the date of this letter, approximately 326 wallets totaling approximately USDT 435 Million for the Department of Justice, US Secret Service, and FBI. [. . .] We look forward to maintaining a close working relationship with law enforcement, policymakers, and regulators in shaping a secure, compliant, and resilient future for digital currencies.

During the Canadian trucker protests against pandemic mandates in early 2022, commercial banks and payment providers facilitated the Canadian government’s demand to freeze protesters’ financial assets and disable supporters’ ability to donate to fundraising campaigns for the truckers. Similarly, the UK government is currently forming legislation that would allow authorities to access citizens’ bank accounts and seize control of their finances — under the guise of combatting fraud.

In both of these examples of the public-private abuse of claimed authority, two mechanisms were and are needed to enforce tyranny: agreement (that is, the banks and payment providers’ willingness to collaborate) and legislation (either existing or new). But in a world of solely digital money, neither policy debates nor the passing of legislation are strictly necessary. Total surveillance of our use of money and the ability to programme our spending is innate to the “new world currency” —USD SHC.

From humanity’s perspective, no matter where we reside, the most alarming aspect of digital currencies — stablecoins, retail CBDC, or otherwise — is their surveillance capabilities and, in particular, their programmability feature. Trump’s new executive order on digital finance suggests that instead of elected officials programming our money, this task should be handed over to multistakeholder partnerships.

To understand why programmability is a risk to all of us, consider the words of Bo Li, the former Deputy Governor of the Bank of China and the current Deputy Managing Director of the IMF. In October 2022, Bo Li said:

CBDC can allow government agencies and private sector players to program — to create smart contracts — to allow targeted policy functions. For example, welfare payments; for example, consumption coupons; for example, food stamps. By programming CBDC, [. . .] money can be precisely targeted [to] what kind of [things] people can own, and [the kinds of ways] this money can be utilised. 

Digital “money” can be programmed to automatically bar us from donating to the “wrong” cause or from transacting with certain “undesirable”individuals. Every transaction we make and all funds we receive will be recorded on the corresponding “ledger” (likely to be a blockchain) from which our financial activity will be monitored, analysed, and inspected. Such a system obviates the need for legislation to snoop into our bank accounts.

China’s digital states — WeChat pay, and the similarly popular Alipay — are fully integrated with China’s e-CNY retail central bank digital currency (r-CBDC). China’s stakeholder capitalist approach to controlling its “customers” payments is not dissimilar to that currently being pursued in Ukraine—using its e-Hyrvnia r-CBDC—and a similar system is proposed by the Russian public-private state.

The head of the State Duma Committee on Financial Markets, Anatoly Aksakov, told the news outlet Rossiyskaya Gazeta that the battle against cybercrime and financial fraud meant that the Russian retail CBDC — the digital ruble — would allow accounts to be blocked, depending on “certain rules.” Payment restrictions could be applied, transactions inspected and control measures taken “if necessary,” he said.

Also adopting the stakeholder capitalism model, Aksakov said Russia’s “major telecom operators, cybersecurity experts and key IT companies,” alongside the commercial banks, would partner with the Russian government to put together these “new measures.” Looking to the future, he suggested “joint ventures” could include the “American banks,” adding that “Visa or Mastercard” could assist with the rollout of the digital ruble control measures.

Like Bo Li, Anatolov also emphasised the social engineering potential of the digital ruble: 

Payments in the digital ruble can be linked to smart contracts, where the transfer or remuneration to the contractor is regulated by a computer program, not a person. [. . .] We are now focusing on using the digital ruble to control the targeted spending of the [fiscal] budget. [. . .] Should we convert maternity capital or child benefit into the digital ruble and make it so that they cannot be spent on alcohol and cigarettes? In my opinion this is a justified measure and such restrictions are necessary.

The US is evidently taking a different path towards its proposed digital state, preferring cryptocurrencies and stablecoins for programmability. But irrespective of whether your government and its partners opt for the retail CBDC or the approved stablecoin route, the outcome is a digital surveillance and control system.

The Programmable Digital State

Stablecoins are certainly no less programmable than CBDCs. Global outsourcing digital employment agency Rise observed:

The programmability of stablecoins through smart contracts opens avenues for innovations such as machine-to-machine payments in IoT applications. [. . .] The future of stablecoin payments is bright, with ongoing innovations and increasing adoption promising to transform how we conduct financial transactions.

These technological innovations portend much more than simply transforming “how we conduct financial transactions.” In its totality, interoperable, AI-controlled digital technology threatens to change every aspect of our lives. If it does, we should not lose sight of the fact that AI is programmed by motivated human beings who hold ideological beliefs.

The Internet of Things (IoT), the Internet of Bodies (IoB); advances in machine-to-machine (M2M) payments — with AI algorithms automatically deducting digital money from our digital wallets absent any human interaction –– and an interconnected network of smart homes on smart grids paints a dystopian future few of us wish to contemplate. Unfortunately, the enabling gov-corp Technates are being built.

The digital currency powered smart home concept has already arrived. This is achieved by linking IoT powered homes to digital wallets overseen by surveillance of the smart grid to which they are attached. Howard Lutnick’s—Trump’s pick for secretary of commerce — investment in Satellogic, via Endeavour, places him and his partners in prime position to capitalise on what the WEF calls the “trillion dollar opportunity” presented by the Earth Observation industry (EO). Orbiting satellite networks harvest data from digital devices and the subsequent AI analyses of the gathered EO data is set to revolutionise pretty much every industrial sector.

Now in office, Lutnick can be confident in his assertion that Satellogic and its investors, including Tether, are “uniquely positioned to dominate the Earth Observation industry.” Just as cryptocurrencies, stablecoins in particular, are providing space for expansion of US debt, so to they are enabling accelerated investment in the development of the emerging “digital states.”

Brain-computer interface (BCI) technology, such as that being developed by Musk’s Neuralink, is bringing us closer to becoming “technoplastic beings.” It comes as no surprise that Peter Thiel is a Neuralink investor. Thiel also invests in Musk’s BCI competitors — Blackrock Neurotech is one. Again, Tether is also an investment partner of Blackrock Neurotech.

There is evidently technological competition. On the one hand we have Musk’s Space X, Neuralink and X-pay, on the other we have Sattelogic, Blackrock Neurotech and Tether. But as we can see from Thiel’s investment strategy, it is the transhumanist and neurowarfare potential of BCI technology that excites technopopulist oligarchs. Competition stimulates development until the winning monopoly establishes itself.

The programmable nature of the so-called “digital money,” combined with smart devices on smart grids, enabling precise monitoring of our energy use means that, de facto, “Energy Certificates” are being rolled out. 

Trump’s digital finance executive order does not nullify the threat posed by CBDCs. It simply diverts public attention away from the immense threat posed by programmable digital currency in general.

Programmable, privately issued stablecoins are intended to avert the looming US debt crisis by absorbing US debt in cryptocurrencies. But the evident additional hope is that this tactic will give the US a head start in the race toward Technocracy.

When Technocracy was designed in the 1930s, the scale of the surveillance and control system it proposed was soon discarded as unworkable. The idea of creating a bureaucracy capable of monitoring the energy use of every citizen and every business across a continent, using the technology of that day, was a fantastical proposition. Measuring a citizen’s or business’ energy usage via any kind of manageable monetary system, with expenditures controlled by linking the currency to identity, was simply not feasible.

But today, not only is Technocracy finally technologically possible, the infrastructure for the rollout of Technocracy is ,as a result, being actively constructed.

Technologically, such a dystopia is well within the realm of possibility. Do you imagine that the oligarchs behind the construction of the necessary infrastructure would never implement this digital panopticon? If so, perhaps it is time to ask yourself why they are building it. Is it simply because people like Elon Musk want us to live “lives of abundance”?

To be clear: programmable money combined with digital ID is likely to enable oligarchs, via public-private partnership, to oversee “the science of social engineering, the scientific operation of the entire social mechanism”—that is, Technocracy. It will potentially give them total control of the distribution of “goods and services to the entire population.” In short, technological innovation has made a Technate eminently possible.

The American Multipolar Technate

The newly not-elected prime minister of Canada, Mark Carney, is among the few, in the current crop of politicians, who is closely and directly connected to the globalist oligarchy. In a interview with Juno News, given shortly before he became prime minister, Mark Carney argued for the alleged benefits of said global oligarchy:

I know how the world works, I know how to get things done, I’m connected. [. . .] People will charge me with being elitist or a globalist, to use that term, which is, well, that’s exactly, it happens to be exactly what we need. 

Carney’s proposed Synthetic Hegemonic Currency (SHC) is intended to position the West in preparation for the emerging multipolar world order. It is obvious, therefore, that multipolarity poses no threat to globalist oligarchs.

The so-called “global elite” have always been quite open about their ambitions, but Carney’s words suggest that they feel extra-emboldened at the moment. There is nothing new about their concept of a world split into more manageable “regions” or “poles,” but we do seem to be approaching the end of an inexorable path toward it.

We do not have to take that path. It is not yet set in stone.

Carney has openly told us that he and his globalist cronies have not haphazardly stumbled into his proposed SHC, nor have they randomly meandered into the clutches of a multipolar world order or its new IMFS. Conscious, deliberate decisions have been made, and specific steps have been taken, to bring about this state of affairs.

There are people who insist that the push toward multipolarity is being led by the BRICS+ nations — in particular, the Russian and Chinese governments. President Putin and Paramount Leader Xi Jinping have been prominent advocates of multipolarity, for sure. Speaking in October 2024 in the lead-up to the 16^th BRICS Summit in Kazan, Russia, Xi explained the multipolar vision. He said it is about fostering “inclusive economic globalization.” This can be done, he noted, by building “solidarity and cooperation” between countries.

The BRICS (now BRICS+) project forms a bloc, or “pole,” of nation-states. It has already started to redesign globalism. As pointed out by former Brazilian President Dilma Rouseff, who now chairs the New Development Bank (NDB) at the heart of the BRICS+ project, “measured by GDP, the BRICS countries have already surpassed the G7 in importance.”

In truth, a multipolar world order has always been the penultimate destination prior to establishing full-blown, centralised global governance. The evidence supporting this conclusion is abundant.

Renowned American historian, professor, and author Carroll Quigley meticulously catalogued the activities of the British/American oligarch network that was inspired by the imperial vision of the early-20th century Rhodes-Milner Group (also known as the Round Table Group). In a 1974 interview with Washington Post reporter Rudy Maxa, Quigley spoke about the “three-power world” that the network envisaged prior to WWII. The idea was that a transatlantic bloc and a united European bloc and an Eastern Soviet bloc would dominate a global “balance of power” structure.

Following a 1956 Special Studies Project directed by Henry Kissinger at the request of the Rockefeller Brothers Fund, a 500-plus-page document titled Prospect for America: The Rockefeller Panel Reports emerged (its copyright spans 1958–1961). The five reports in it aimed to define the problems and opportunities the US faced in the late 1950s, clarify national objectives, and develop a framework on which national policies could be based.

The United Nations had already been established in 1945 (the UN headquarters was built on land donated by the Rockefellers), but, according to some of the panel report researchers, this international organisation hadn’t delivered on its goals. So, these researchers returned to the original prospect outlined by the Rhodes-Milner Group and suggested “a world divided into smaller units” [page 26] that would “consist of regional institutions under an international body of growing authority” [page 26]:

The most natural multination arrangements are frequently regional. [. . .] Fully developed, they imply a joint accord on monetary and exchange arrangements, a common discipline on fiscal matters, and a free movement of capital and labor. [. . . ] We believe that this regional approach has world-wide validity. [. . .] What is needed immediately is a determination to move in the direction they imply. Regional arrangements are no longer a matter of choice. They are imposed by the requirements of technology, science, and economics. Our course is to contribute to this process by constructive action [pages 188–190].

In October 1968, the Rockefellers supported the foundation of a globalist international policy think tank — the Club of Rome — to implement the “regional arrangements” that they had declared seven years earlier to be “no longer a matter of choice.”

The 1973 third symposium of the WEF is considered by the WEF to have been an important moment in its history.  At this event, Club of Rome co-founder Aurelio Peccei outlined the Club’s concept of the “sustainability of global economic growth” which, WEF delegates were told, required society to reconcile “economic development and environmental constraints.” Consequently, with this in mind, the WEF adopted “Klaus Schwab’s stakeholder concept.”

In same year, September 1973, the Club of Rome wrote a confidential report titled “Regionalized and Adaptive Model of the Global World System.” It proposed that the world be divided into ten “Kingdoms”—comparable to blocs, or poles. Though presented simply as an analytical computer model, the Club of Rome added a vision statement to its report:

Our efforts in the immediate future will be concentrated on further use of the already developed [Kingdoms] model. [. . .] Implementation of the regional models in different parts of the world and their connection via a satellite communication network [will be] for the purpose of joint assessment of the long-term global future by teams from the various regions [Kingdoms or “poles”]. Implementation of the vision for the future outlined by leaders from an underdeveloped region in order to assess with the model existing obstacles and the means whereby the [multi-Kingdom or multipolar] vision might become a reality.

More recently, World Economic Forum (WEF) founder Klaus Schwab co-wrote, with Thierry Malleret, COVID-19: The Great Reset. One point they made in their book is that global supply chains are fragmenting due to global existential crises. They pinned the blame on a lack of cohesive global governance and offered a solution:

The most likely outcome along the globalization–no globalization continuum lies in an in-between solution: regionalization. The success of the European Union as a free trade area or the new Regional Comprehensive Economic Partnership in Asia (a proposed free trade agreement among the 10 countries that compose ASEAN) are important illustrative cases of how regionalization may well become a new watered-down version of globalization. [. . .] In short, deglobalization in the form of greater regionalization was already happening. COVID-19 will just accelerate this global divergence as North America, Europe and Asia focus increasingly on regional self-sufficiency rather than on the distant and intricate global supply chains that formerly epitomized the essence of globalization [page 79].

Shortly before the 2025 Munich Security Conference, Trump’s pick for Secretary of State Marco Rubio gave an interview to Megyn Kelly where he said: 

[. . .] it’s not normal for the world to simply have a unipolar power. [. . .] That was an anomaly. It was a product of the end of the Cold War, but eventually you were going to reach back to a point where you had a multipolar world, multi-great powers in different parts of the planet. [. . .] [F]oreign policy has always required us to work in the national interest, sometimes in cooperation with people who we wouldn’t invite over for dinner or people who we wouldn’t necessarily ever want to be led by.  And so that’s a balance, but it’s the sort of pragmatic and mature balance we have to have in foreign policy.

Casting the multipolar world order as a confrontation between great powers but also a “pragmatic and mature balance,” Rubio’s comments were congruent with the view of the globalist think-tank the Council on Foreign Relations (CFR)—which has consistently promoted multipolarity. The CFR believes the international rules-based order (the unipolar model) is “disintegrating at an accelerating pace.”

CFR fellow Thomas E. Graham sees five potential regional poles in a multipolar global governance system consisting of the US, China, India, Russia, and Europe. The CFR line of thinking is that the US can contribute to multipolarity through foreign policy that seeks to constrain China as a great power; nurture India as a power, preserve Russian power and promote European power.

Europe is considered the greatest challenge by the CFR because, despite its economic and possible military might, it “lacks political cohesion.” Therefore, in January 2025 the CFR argued for a new US foreign policy mindset “to encourage Europe to assume the responsibilities of a great power [. . .], one that has the hard power needed to deal with most security contingencies in its immediate neighborhood.”

In March 2025, the Trump administration’s very public press conference spat with the visiting Ukrainian president Volodymyr Zelenskyy was immediately followed by the US supposedly withholding military aid to Ukraine. This was met with seeming condemnation from the US’ European partners who responded by publicly announcing an €800 billion ($841.5 billion) “ReArm Europe” plan. This gives further impetus to the EU’s long-held desire for European military unification.

It seems that Trump’s order not to supply US arms to Ukraine doesn’t apply to Thiel-backed enterprises like Anduril. While Trump was telling American and European voters that the US would not supply arms, Anduril was finalising a deal with the UK government to send their Altius 600m and Altius 700m attack drones to Ukraine.

It is hard to say if the press conference between Trump (the former reality TV personality) and Zelenskyy (the former actor and TV comedian) was entirely staged or not. Obviously, both presidents were, at the very least, briefed prior to their quite extraordinary public row. What is not in doubt is that the trajectory of the global policy response is precisely as modelled and suggested by the think-tanks.

Elon Musk’s ‘X’ social media platform is, at the time of writing, heavily promoting Trump as the global peace maker who just wants to stop the slaughter in Ukraine. Consequently, the public debate swirling across the entire western media and social media landscape is polarising opinion between those who want peace and those who argue this is short-sighted appeasement and Ukraine must keep fighting to stave off “Putin’s aggression.” Meanwhile, the globalist plans for a multipolar world order are surging ahead regardless of which of those two, pre-determined options is championed by the US or any other government.

Political leaders, influential financiers, and representatives of policy think tanks across the West have evidently been planning for some time, even enthusiastically endorsing, construction of a regionalised multipolar world order. Their fundamentally globalist project is the latest iteration of the oligarchs’ persistent dream: global governance under their exclusive control.

The Munich Security Conference (MSC) is ostensibly a transatlantic forum where hi-ranking so-called “thought leaders” engage in a “marketplace of ideas.” The self-appointed glitterati discuss, plan and agree security and defence policy trajectories. The theme of MSC 2025 was “Multipolarization.”

In the executive summary for the Munich Security Report 2025 we are told that “multipolarization is a fact.” Again, presenting us with the idea that things just happen organically: there is no design.

We are given to understand that those who are positive about multipolarity see “opportunities for more inclusive global governance and greater constraints on Washington.” Whereas, those who are more pessimistic believe it “increases the risk of disorder.”

The report notes the international enthusiasm for the United Nations 2024 Pact for the Future, replete with its Global Digital Compact and a Declaration on Future Generations. Following the UN’s “quiet revolution,” the Pact is grounded in stakeholder capitalism’s public-private partnerships and “draws on the energy and expertise of governments, civil society and other key partners.”

The UN Pact promises more public-private global censorship, centralised world economic and financial control partnerships (global taxation), and firmer mechanisms for global governance partnerships to seize control of nation states as deemed necessary. The MSC thought leaders conclude “for this cooperation [UN Pact] to materialize, the world could well use some ‘depolarization’.”

The evident plan is for the global order to undergo a process of creative destruction to deterritorialize it in its current form and reterritorialize it as a more efficient multipolar global governance structure. To this end the MSC report notes:

The next four years will show whether a more selectively engaged US fuels or contains global disorder. As other actors will (have to) step up to fill the gap, the multipolarization of the international system could accelerate.

Despite US policy decisions supposedly being designed to confront and oppose China, again, as a result of the same US policy decisions, China has shown it is ready to “fill the gap.” In his MSC speech the head of China’s Central Foreign Affairs Commission — China’s foreign minister — H.E. Wang Yi said:

[. . .] we should work for an equal and orderly multipolar world. [. . .] China will surely be a factor of certainty in this multipolar system, and strive to be a steadfast constructive force in a changing world. [. . .] The U.N. is at the core of practicing multilateralism and advancing global governance. [. . .] We have firmly upheld the authority and stature of the U.N.

J.D. Vance address to the MSC has been reported as harsh criticism of European censorship of its citizen’s and its media, especially with reference to the censorship of US commentators. Within his criticisms, Vance also advocated construction of a European “pole”:

[. . .] the Trump administration is very concerned with European security and believes that we can come to a reasonable settlement between Russia and Ukraine, and we also believe that it’s important in the coming years for Europe to step up in a big way to provide for its own defense. [. . .] [W]e think it’s an important part of being in a shared alliance together that the Europeans step up while America focuses on areas of the world that are in great danger.

The extremely rapid response to the US foreign policy shift toward Ukraine has stimulated EU military unification and rearmament. This is entirely in keeping with the strategies and plans laid out by globalist policy think-tanks. Perhaps random events collide and every decision is nothing more than a reaction, but the weight of evidence thoroughly contradicts mere “coincidence theory.”

We are supposed to believe that US isolationism is the pessimistic response to multipolarity while the more positive multilateral approach is closer aligned to the essence of the UN’s Pact for the Future. Either way, both pessimistic isolationism and positive multilateralism seem likely to accelerate multipolar global governance.

Despite the different approaches, the geopolitical outcomes are seemingly indivisible. Both portend a regionalised world order bureaucracy and this has always been the planned administrative reorganisation of the planet prior to imposing firm global governance and, ultimately, global government.

The Trump administration is blatantly declaring its isolationism. Trump, has publicly withdrawn from the World Health Organisation, the Paris Agreement, and the US pact with the OECD to work on a Global Tax Deal. He has imposed international trade tariffs and his toughening of US border security is apparently one of the primary reasons he was re-elected.

A lot of what Trump and his staff say is rhetoric and horse-trading.

A lot of what Trump and his staff say is rhetoric and 
horse-trading. OECD Secretary-General Mathias Cormann has already said Trump’s posturing was interpreted as “concerns raised.” Cormann also said the OECD would “keep working with the U.S. and all countries at the table to support international cooperation that promotes certainty, avoids double taxation, and protects tax bases.” Trump may be haggling for a stronger negotiating position, and we should certainly take his grand statements with a pinch of salt.

That said, if we put all this together, what we see is a distinct narrative shift toward polarisation. It is important to stress that we’re witnessing a full-on propaganda offensive. Nevertheless, we are supposed to believe that there are real geopolitical tensions between the EU and the US, not just in relation to Ukraine, but in relation to Greenland. The European Council President António Costa said Denmark had the EU’s “full support” in the Danish government’s alleged confrontation with the US government.

Trump has also made aggressive gestures toward BRICS+, warning that tariffs will rain down if the group dumps the USD.

Meanwhile, one of the BRICS+ leading nations, Russia, has said that Trump’s “withdrawal” from the WHO risks “dangerous consequences.” Alexei Kurinney, deputy chairman of the State Duma Committee on Health, said that “from the point of view of protecting exclusively the interests of the United States, this is an isolationist step.”

In response to seeming US isolationism, the Chinese government has also criticised the US withdrawals from the WHO and from the Paris Agreement. As we’ve just highlighted, China has offered itself as a reliable global partner to these two entities. China’s Foreign Ministry spokesperson Guo Jiakun said:

China is concerned about the US announcement to withdraw from the Paris Agreement. [. . .] Climate change is a common challenge that all of humanity must face. [. . .] The role of the World Health Organization should only be strengthened, not weakened.

The stage is clearly set for the final push toward the multipolar world order. But, strange as it may seem, this very push toward multipolarity is bringing the nations closer to a single global political, economic, and (perhaps most notably) financial and monetary “union.” In other words, multipolarity, as it is presented to us, appears to be a monumental psychological operation (psyop).

There have been many attempts over the years to form a North American Union (NAU), which would be composed of Mexico, the United States, and Canada. This geopolitical goal received a boost in 1994 with the signing of the North American Free Trade Agreement (NAFTA), but the plan stalled after receiving strong resistance by the populace of all three countries.

On and off, the US government has made numerous attempts to pry Greenland away from Denmark — more often than not citing US defence needs. Greenland is an autonomous territory within the Kingdom of Denmark. Its inhabitants are therefore citizens of Denmark and, by extension, of the European Union. In 1951, the US and Danish governments signed the Defense of Greenland Treaty, which ostensibly appeased US national security concerns. The US maintains the Pituffik Space Base — formerly known as Thule Air Base — on the island of Greenland.

Greenland has never been mentioned with respect to any proposed versions of either a North American Union or a free trade agreement. The prospect of building the Praxis gov-corp Technate on Greenland has evidently reignited enthusiasm.

The original American technocrats, however, did include Greenland, along with Caribbean island states and Central American states — as far south as the northernmost territory of South America’s Columbia and Venezuela — in their proposed model of a North American Technate.

Prior to this year’s inauguration, Trump outlined his dreams of establishing  what can only be described as a plan almost geographically identical to Technocracy Inc.’s original North American Technate. In a series of off-the-wall-sounding statements — not unusual for him — Trump indicated that he wanted to add Greenland, Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama to a NAU of Mexico, the US, and Canada. He even threatened the use of force, both economic and military, to construct a geopolitical map that is exactly mirrors the aforementioned North American Technate.

There is no realistic prospect, in any geopolitical sense, of this imaginary North American Technate actually being formed. But, as we have already discussed, the Dark Enlightenment and Technocracy portend a kind of geopolitics more reminiscent of the system of city states ruled by the Venetian bankers. The Venetian city state was perhaps the most powerful seasteading project the world has ever known.

Trumps seemingly weird ideas about seizing control of Gaza and Greenland, as if they can simply be acquired as sovereign states, and where the sovereignty of the people living there is considered “with derision,” is the epitome of the Dark Enlightenment thinking. Forced displacement of the “unthinking demos” is meaningless if you fervently believe “the system must be first.”

The North American Technate map that Trump appeared to deliberately outline first appeared on the cover of the Technocracy Study Course. Yet even the original technocrats didn’t explain how all these nation-states would fall in line with their unhinged ideas.

Ironically, the technological advances that have today made the prospect of a Technate feasible have also rendered the concept of a geographical Technate moot. By its nature, global communication technology globalises. The technocrats’ notion of a geographically bounded political Technate has largely been subsumed by the globalist oligarchs’ rollout of global governance architecture and technology.

The Club of Rome’s Ten Kingdom model was precisely that: a model. While it is obvious there has been a global effort to make that model a functioning reality, it is clear that the gov-corp Technates under construction will first and foremost be economic and financial administrative zones rather than physical or geopolitical nations as we understand them. The technology used to construct each digital state is common to all.

Gov-corp realms may be distinct, with, for example, Amazon dominating its sov-corp realm in the West and the Alibaba-Group dominating its sov-corp realm the East, but the “patchwork of realms” will be global. The decentralisation toward the digital city state is the network enabling centralised control. The formation of regionalised poles looks more like bureaucratic reorganisation in preparation for a simplified global governance administration of realms.

Nonetheless, the symbology of Trump’s otherwise bizarre imperial statements seems relatively easy to interpret. Trump and/or his close advisers want to make it clear that Technocracy and the Dark enlightenment are the ideas driving the administration. I suspect Trump will say whatever he is told to say, within reason, on this subject or any other. In my opinion, posturing as a would-be emperor probably appeals to his ego. Personally, I doubt Trump even understands what a gov-corp Technate is, but he may.

Whatever the case, the communicated signal could not be made more obvious: The neoreactionary technocrats are in control.

Thiel and Musk are not the leading architects of the project to establish the global gov-corp Technate. But they are firm believers and, as made men, have been positioned to lead the US in that direction. Ultimately, the digital transformation of the Fourth Industrial Revolution renders the very concept of the nation-state superfluous. The technocrats and accelerationist neoreactionaries know this.

Oligarchs have never had an affinity for one nation more than for any other. The system they seek ignores nation-states completely. If their plan succeeds, the only borders that will still have any relevance to them will be those delineating the “Kingdoms” or “poles” of a much-simplified multipolar global governance structure overseeing a network of realms. 

Once the mycelium-like global financial network is thriving and once seamless cross-border transactions are instantaneous — enabled by a digital SHC fit for a multipolar world — then geographical political borders will cease to have any economic or monetary meaning. As Peter Thiel observed in a 2001 PayPal all-hands meeting:

The ability to move money fluidly and the erosion of the nation-state are closely related.

The global system of gov-corp Technates that is emerging represents the most oppressive, totalitarian system of absolute behavioural control ever devised. There will be no need for government policy when entire populations — comprised of millions of individual human beings who were born to think for themselves — can be mentally hijacked and literally programmed by corporate behemoths.

But of all the psyops foisted upon us, the greatest among them is the millennia-long propaganda campaign to make us believe we are powerless. This is perhaps most clearly illustrated by the “representative democracy” charade.

Recognising the staggering audacity of the globalists’ plans and the enormous resources they presently have under their command is not to be “blackpilled.” On the contrary, it is the first step toward liberation. In order to resist the maniacs, we first have to understand what they’re doing and how and why they’re doing it. After that, the only hurdle we must surmount is that of putting all of our own solutions into effect.

Our solutions do not have to reimagine the world, we just have to reimagine our tiny portion of it. You don’t need to worry about energy costs if you are energy self sufficient—or as close to it as you can be. You don’t need to be too preoccupied with food prices if you grow it yourself or barter goods and services with those that do, and you don’t need to be overly concerned with exchange rates if you choose your own medium of exchange and trade with other like-minded people in your own community.

International financial institutions do not control “money.” Oligarch investors do not control technological development. Governments do not control populations. Only deception, coercion and the use of force ensures these false perceptions. Deception works by bombarding people with propaganda and psyops. Coercion and manipulation are designed to convince us to accept that which we can — and must — decisively reject. Force will almost certainly be used if we do, but there are also eight billion of us.

There are better alternatives to top-down oligarch control. Despite the hopes of Musk and Thiel and their ilk, gov-corp Technates are not inevitable. We need only peaceably decline to obey their demented edicts, quit subscribing to their insane schemes, and build something better.

The Dark MAGA Gov-Corp Technate — Part 2.

What did Elon Musk mean when he said he was “dark MAGA?” Exploring this question will certainly take us to a very dark conclusion. Yet, ironically, it is this very conclusion that, once seen in the right light, can liberate us.

This two-part series examines the genuine but misplaced hopes of the millions of US citizens who elected Donald Trump to his second non-consecutive term. Unbeknownst to them, they have voted to live in a Technate administered by what is called “gov-corp.” In so doing, they have taken another step toward a multipolar world order, or “New World Order,” as some have long called it.

Shortly before the November 2024 election, Elon Musk, speaking at a Trump rally in Butler, Pennsylvania, announced, “I’m not just MAGA, I’m dark MAGA.” Only a couple of months earlier Trump had survived an alleged assassination attempt at the same Butler show grounds. Sharing the stage with “bullet-proof” populist hero Trump, an absolute shoe-in for the presidency, Musk seized his moment.

The Make America Great Again (MAGA) acronym is broadly understood. But Musk’s added adjective “dark” is little understood — and implies much more.

Explanations for his “dark MAGA” declaration have ranged from Musk pushing the Dark MAGA meme coin to Musk casting himself as a super-antihero or even an advocate of a violent fascist takeover of the US. None of these claims have addressed his more obvious reference. Musk is one of a cadre of technocrats behind the Trump presidency who promote the ideas encapsulated by the Dark Enlightenment.

Peter Thiel, a co-founder of PayPal along with Musk, is probably the best-known proponent of the Dark Enlightenment while Musk is the best-known proponent of Technocracy. But, as we shall see in this article, these sociopolitical theories have considerable overlap and are mutually reinforcing.

Elon Musk’s Technocratic Heritage

In a 2021 SEC filing, Tesla CEO Elon Musk and Tesla’s then-Chief Financial Officer Zach Kirkhorn officially changed their respective working titles to become the “TechnoKings” of Tesla. This might seem like nothing but irreverent fun—consider that Kirkhorn was also known by the Game of Thrones title of “Master of Coin”—but Musk certainly understands the gravity of Technocracy and the associated term “technocrat.”

Their careful choice of words is an important point emphasized throughout this article. While oligarchs like Musk and Thiel often express ideas in a seemingly flippant manner—or as if the ideas sprang from out of nowhere—these apparent offhand remarks are not meaningless. It is Aesopian language indicative of the core beliefs held by people like Musk, Peter Thiel, Jeff Bezos, and other members of what Council on Foreign Relations think tank member David Rothkopf generously characterizes, in his book on the subject, as the “Superclass“: people who can “influence the lives of millions across borders on a regular basis.”

The “joke” is on us. Or, rather, on those of us who assume it’s all just a joke.

Both Musk and Thiel are members of the “superclass,” though “parasite class” might be a more fitting description for the oligarchy Rothkopf describes. “Insider” Rothkopf’s estimate of around 6,000 individual oligarchs, whose decisions impact the lives of the remaining eight billion of us, seems feasible.

Musk and Thiel are just two among the 6,000 by virtue of being welcomed into the “superclass” by behind-the-scenes oligarchs who do not feature on the published lists of the world’s wealthiest men and women. Musk and Thiel are made men. We are focusing on them because they are prominent accelerationist technocrat supporters of the Trump/Vance administration.

Elon Musk’s maternal grandfather was Joshua N. Haldeman (1902–1974), who hailed from Pequot, Minnesota. In 1906, when Joshua was four, his parents took the family north and settled in the Canadian province of Saskatchewan. In 1936, after 34 years of life on the western plains of the US and Canada, Joshua Haldeman moved to Saskatchewan’s provincial capital, Regina, where he established a successful chiropractic business.

Between 1936 and 1941, Haldeman did more than realign spines. He was also the research director and leader of the Regina branch of an up-and-coming entity known as Technocracy Incorporated, shortened to Technocracy Inc. In 1940, while serving in that post, he was arrested by the Royal Canadian Mounted Police (RCMP) for violating Defence of Canada regulations, under which Technocracy Inc. was deemed an “illegal organisation.” As a result, Haldeman was denied entry into the US, where he had intended to deliver a speech promoting Technocracy. He was then fined and given a suspended sentence for heading up the controversial Technocracy Inc.

Following his 1941 conviction, Haldeman joined the Canadian Social Credit Party (Socred), which had been formed in 1932 by evangelist William Aberhart. Socred sought to implement the “social credit” economic theory of British engineer and economist C. H. Douglas. Like Socred, Technocracy was based upon the “industrial efficiency” ideas of engineer Frederick Winslow Taylor (Taylorism). It also dovetailed with the “conspicuous consumption” economic theories of Thorstein Veblen.

C. H. Douglas presented his theory of social credit to tackle what he saw as the inequality of opportunity created by the centralised control and hoarding of resources and wealth. He identified the “macro-economic gap” between retail price inflation and wage growth. He suggested filling that gap by creating the “National Credit Office”—which would be independent of state control—to issue “debt-free” credit to consumers. Part of this National Credit would be used to lower retail prices. The remainder would be distributed to all citizens, irrespective of their personal financial situation, as a way of creating consumer demand for goods. Douglas’ suggestion was an early model of Universal Basic Income (UBI).

Joshua Haldeman’s family of seven, which included a daughter, Maye Haldeman, left Canada in 1950 to set up base in Pretoria, South Africa. As entrepreneurs and adventurers, they travelled extensively. By her own account, Maye Haldeman was close to her parents and adopted their entrepreneurial spirit, sense of adventure and work ethic. Unavoidably, she was also familiar with her parents’ political ideas. Maye recalled that, as a child, she and her siblings would do their “monthly bulletins and photocopy newsletters, and then put the stamps on the envelopes.”

Maye Haldeman married Errol Musk in 1970. Their son, Elon, was born in Pretoria a year later. He was an infant when his grandfather died in a plane crash. Nonetheless, as he was growing up, Elon learned about and became intimately familiar with his grandfather’s political philosophy.

Though Musk was evidently close to his mother, he elected to stay with his father in Pretoria when his parents divorced in 1979. After Elon’s relationship with his father soured, he encouraged his mother to claim her Canadian passport, according to Maye. Her doing so enabled Elon to quickly secure his own Canadian passport, emigrate from South Africa—which he did at age 17—and thereby avoid compulsory military service in that country.

Elon’s ultimate goal was to live and work in the US. But before that, he decided to head from Montreal to Waldeck, Saskatchewan, where, upon returning to his roots, he worked as a farm hand on his second cousin’s farm. There, he awaited his mother Maye’s arrival from Pretoria. She was followed by Elon’s two siblings, Kimbal and Tosca, who also wanted to be closer to the Haldeman side of the family in Canada.

Musk studied at Queen’s College in Kingston, Ontario, for two years before acting upon his aim of settling in America. He transferred to the University of Pennsylvania, where he earned a bachelor’s degree in physics and economics. Subsequently, he interned in Silicon Valley tech companies before abandoning education to pursue his entrepreneurial ambitions.

Fast Forward to Today

In October 2024, Amazon billionaire Jeff Bezos posted on Musk’s “X” platform an alluring statement: “The Network State for Mars is being formed before our eyes.” Musk enthusiastically replied, “The Mars Technocracy.” To which Bezos responded, “Count me in.”

As he continues to dream about colonising Mars, Musk has made it abundantly clear which political system he prefers. In 2019, he wrote: “Accelerating Starship development to build the Martian Technocracy.” Note his use of the word “accelerating.” For Musk “accelerating” doesn’t simply mean an increase in velocity.

Musk has long advocated Universal Basic Income. Here’s one instance of his embrace of UBI: At the World Government Summit in 2017, Musk said, “We will have to have some kind of universal basic income.” Another example: In June 2024, speaking with then-Prime Minister Rishi Sunak at the UK-convened first global “AI Safety Summit,” Musk painted a Utopian vision of an artificial intelligence-dominated society and “an age of abundance” before adding, “We won’t have universal basic income, we’ll have universal high income.” In other words, he was suggesting that the masses would have perfect “lives of abundance” enabled by the ultimate AI-controlled distribution of UBI.

Musk desires Technocracy—and a social credit system—just as his grandfather Joshua Haldeman did. This is evident beyond his personal history and his words. Everything Musk does is completely congruent with these dual pursuits. But when we are invited to discuss Technocracy in reference to Mars, we are of course asked to ignore all the evidence that exposes Musk’s and his fellow oligarchs’ attempts to establish a “Technate”—a system of technocratic, totalitarian continental control—here on Earth.

As is the case with many of his oligarch brethren, Musk’s business acumen and his ethics are highly questionable. It appears he has survived and thereafter thrived in business solely because of his network connections, his considerable state backing, and the largess of his investors. As George Carlin wisely observed, “It’s a big club.”

Musk invested more than a quarter-billion dollars to install Trump in the Oval Office. Naturally, he anticipates a return on his investment. In fact, that ROI is a done deal: Musk already makes billions from US taxpayers through a web of government contracts. For tycoons like Musk, money is simply a means to an end: obtaining power. His wealth has positioned him to start seriously implementing his grand vision of Technocracy.

Musk’s dive into Technocracy is underway through the newly established temporary agency in Washington, D.C., he now chairs. Announced last November by Trump, created on his first day in office, and supposedly set to complete its mission by the summer of 2026, the US Department of Government Efficiency, known as DOGE, appears to be a nascent Technocracy.

Venture capitalist Musk and biotech billionaire Vivek Ramaswamy were handpicked to run DOGE with the help of Cantor Fitzgerald CEO Howard Lutnick. Vivik has since departed to run for Governor of Ohio. Lutnick was Trump’s choice to become the US Secretary of Commerce and was recently confirmed. His appointment raises many concerns. Not least of them is his link to Satellogic, a strategic partner of Peter Thiel’s Palantir Technologies. This link reveals Lutnick’s personal investment in the public-private surveillance state that is governed by US and Israeli intelligence agencies.

Yet Lutnick has an even more significant conflict of interest. He is steering Cantor Fitzgerald to back Tether (USDT), a stablecoin that is increasingly purchasing US Treasurys. As we move toward the era of digital currencies, the US government project to save its debt-laden dollar and its fragile economy is closely tied to stablecoins. Thus, as Secretary of Commerce, Lutnick will be in a position to guide the development of markets toward the new US digital economy. We’ll expand on this angle in Part 2.

Perhaps it’s just a coincidence that “the Doge” was the formal title of the chief administrator (magistrate) of the mercantile Venetian Republic. As we shall also discuss in Part 2, there are many reasons to suspect that today’s DOGE acronym is not a mere coincidence.

The departure of Ramaswamy and Lutnick from the DOGE project appears to leave Musk as its sole “CEO.” A corporate monarchy, led by a CEO “king,” (TechnoKing) is in keeping with the theories underpinning the Dark Enlightenment.

The stated purpose of the DOGE is to restructure the federal government to reduce expenditures and maximise efficiency. That goal is in keeping with Taylorism, a foundation of Technocracy.

One of the leading neoreactionaries (we’ll explain this term shortly), Curtis Yarvin, coined the catchy acronym RAGE. It stands for Retire All Government Employees. The parallels between the stated ambitions of the DOGE and the intention of Yarvin’s RAGE are marked.

Apparently, the DOGE will not be an official executive department but will instead operate as a Federal Presidential Advisory Committee, supposedly outside of government. But make no mistake: The DOGE will be inextricably tied to the political process. Its employees will be housed in the former offices of its predecessor, the United States Digital Service. And its helmsman, Musk, will reportedly have a personal office in the West Wing of the White House.

The efficiency ideas of certain nominated experts, starting with Musk, will be given political clout via a new “DOGE” subcommittee of the House Committee on Oversight and Government Reform. This subpanel is chaired by controversial congresswoman Marjorie Taylor Greene (R-GA)—often referred to as MTG. On the surface, it may look like an oversight subcommittee with authority over the science, engineering, and technology “experts,” but in practice the “experts” will be effectively controlling the related political policy decisions. This concept of policy designed by technical “experts” is central to Technocracy.

J.P. Morgan Chase Chairman and CEO Jamie Dimon is among those who have welcomed the DOGE plan. Certainly, the proposal to radically reduce or even eradicate US government’s financial regulators appeals to bankers like Dimon. The Trump administration is seeking to seize and centralise control of financial regulators such as the Security and Exchange Commssion (SEC) and the antitrust regulator the Federal Communications Commission (FCC). Consequently, the banks are anticipating a much lighter regulatory touch. Speaking at Davos, J.P. Morgan asset wealth fund manager Mary Erdoes—tipped to succeed Dimon as CEO—said the moves had freed US bankers’ “animal spirits” and set investment banks in “go-mode.”

Given that Elon Musk was neither elected by Americans nor authorized by their representatives in Congress, the DOGE represents a formal shift in political power from the public to the private sector. It is fundamentally a private sector-dominated think tank openly empowered to “restructure federal agencies.” If the DOGE proceeds as suggested, it is clear that, as we pointed out above, elected US representatives—MTG among them—and US senators will not have the upper hand. Indeed, we might question if they are even capable of grasping the ulterior motives of those driving the DOGE concept.

Also, given that Musk and other DOGE supporters—Bezos, for example—have long profited from huge government contracts, and given that the likes of Dimon will doubtlessly be asked to “advise” the DOGE, we see a massive conflict of interest at the heart of the DOGE project. That conflict, like everything else about the DOGE, is aligned with Technocracy, for it affords pecking-order privileges to the very technocrats who seek to control a Technate.

An In-Depth Look at Technocracy

To appreciate why people like Musk and Bezos are so enthused by the prospect of Technocracy, we must understand the full extent of Technocracy. We must grasp not just what it is superficially portrayed to be, but also recognize its deep, dark, humanity-mutating, society-altering intentions and aims.

Technocracy does not merely call for technocratic governance—that is, a sociopolitical system where qualified experts, or “technocrats,” rather than politicians, set policy.

Technocratic governance came to the fore during the 2020–2023 pseudopandemic. Medical “experts,” notably Anthony Fauci and other members of the White House Coronavirus Task Force, were put in positions very visible to the public. They were widely seen as leading the policy response—namely, mass “vaccinations,” lockdowns, small business shutdowns, and other imposed-from-on-high mandates designed to enforce and measure worldwide compliance.

But the Technocracy that Musk, Bezos, and other tech “experts” seek to establish implies more than an experiment in the effects of mRNA injections, more than a test of controlling and mesmerizing the masses.

Technocracy is based on the belief that there are technological solutions to all social, economic, and political problems. The Elon Musks and Peter Thiels of the planet and many more of their ilk share this single-minded belief.

For example, when, 20 years ago, Thiel co-founded the impact investment platform called the Founders Fund, its mission statement noted that “technology is the fundamental driver of growth in the industrialized world.” It also declared that the Founders Fund exists to solve “difficult scientific or engineering problems.” If the right technology succeeded, the Founders Fund rationalized it to be the “shortest route to social value.”

Technocracy offers a form of policy response—there is no political “policy” as we understand the term in a Technocracy—as technological solutions to social problems. But this is only a limited aspect of Technocracy. (Keep in mind, faith in technological solutions is not found solely in Technocracy.)

Technocracy is truly unique, unlike any of the sociopolitical, philosophical or economic ideologies familiar to most of us.

In 1937, Technocracy Inc.’s in-house magazine, The Technocrat — Vol. 3 No. 4, described Technocracy as:

The science of social engineering, the scientific operation of the entire social mechanism to produce and distribute goods and services to the entire population.

To give that definition context, we’ll go back two decades to 1911, when American mechanical engineer Frederick Winslow Taylor, arguably the world’s first management consultant, published The Principles of Scientific Management. His book came out at the culmination of the Progressive Era in the United States.

The Progressive Era was a historical period marked by the political activism of the US middle class, who sought to address the underlying social problems—as they saw them—of excessive industrialisation, mass immigration, and political corruption. “Taylorism,” which was fixated on the imminent exhaustion of natural resources and the advocacy of efficient scientific management systems, was part of the spirit of the age.

In The Principles of Scientific Management, Taylor wrote:

In the past[,] the man has been first; in the future[,] the system must be first[.] [. . .] The best management is a true science, resting upon clearly defined laws, rules, and principles, as a foundation[.] [. . .] [T]he fundamental principles of scientific management are applicable to all kinds of human activities, from our simplest individual acts to the work of our great corporations.

Taylor’s ideas jibed with the theories of economist and sociologist Thorstein Veblen. Veblen proposed that economic activity isn’t just a function of supply and demand, utility and value, but that it evolves with society and is thus shaped also by psychological, sociological and anthropological influences.

Veblen is perhaps best known for his theory of “conspicuous consumption.” He observed that the wealthy signalled their social status through ostentatious display of their purchasing power: expensive properties, cars, jewels, etc. Within the hierarchical class structure, aspiring classes tried to emulate the conspicuous consumption of the class above them. Veblen contended that the cascade effect of this social climbing created demand for superfluous goods and services and that the net economic impact was therefore hopeless inefficiency and wasted resources.

In The Engineers and the Price System, Veblen suggested that technocratic engineers should undertake a thorough analysis of the institutions that maintained social stability. Once the institutions were understood, those with technological expertise should reform them, improve efficiency, and thereby engineer society to be less wasteful. Shortly, we’ll discuss how this idea was later adapted by the accelerationist neoreactionaries.

Both Taylor and Veblen were focused upon maximising the efficiency of industrial and manufacturing processes. That said, they both recognised that their theories could be extended to a wider social context. It was the more expansive application of their proposals that beguiled the oligarchs of the day.

In 1919, Veblen was one of the founding members of a John D. Rockefeller-funded, New York City-based private research university in New York called The New School for Social Research (later renamed The New School). This progressive educational model soon led to the creation of the Technical Alliance, a small team of scientists and engineers notably including not only Veblen but also Howard Scott, who would come to lead the group.

The Technical Alliance was reformulated in 1933 after an enforced hiatus was prompted by Scott’s exposure as a fraudster. He had falsified some of his credentials—as, apparently, had C. H. Douglas. Post-hiatus, Scott was joined by M. King Hubbert—who would later become globally renowned for his vague and generally inaccurate “peak oil” theory—and others. The members of the Technical Alliance renamed themselves Technocracy Inc.

Technocracy was thoroughly outlined in Technocracy Inc.’s 1933 publication of its Technocracy Study Course. According to the study course’s technical specifications, society should be separated into what the advocates of Technocracy (from now on referred to as “technocrats”) call a “sequence of functions.” In this sequence, society as we know it is removed. Instead, centralised control of all human interactions and behaviour is proposed as part of the “social mechanism.”

An entire “social mechanism” subjected to technocrats is called a Technate. A Technate is designed to work “on a Continental scale”—that is, on each continent, or Technate, whose boundaries are drawn on a map. The Technate of North America map includes Greenland, Canada, the United States, Mexico, parts of Central America, northern South America, Caribbean islands, and the eastern Pacific Ocean.

There are no national governments in Technocracy. Nation-states are abolished in each continental Technate.

Driven by the assumed precepts of efficiency, technocrats deem the centralised control of all resources essential:

Technocracy finds that the production and distribution of an abundance of physical wealth on a Continental scale for the use of all Continental citizens can only be accomplished by a Continental technological control, a governance of function, a Technate.

Each function, or “Functional Sequence,” is categorised as either an industrial sequence, a service sequence, or a special sequence. For example, the “Transportation Functional Sequence” and the “Space Tech Functional Sequence” are both industrial sequences. The “Public Health” and “Education” functional sequences are among the service sequences. The “Special Sequences” are those related to security and defence (Armed Services), scientific and technological development (Continental Research), governance of the population (Social Relations), and the Technate’s relationship with other Technates or nation-states (Foreign Relations).

Administration of an entire Technate—each continent—is further subdivided by “Regional Divisions,” each defined according to their longitude and latitude boundary markers and designated by a corresponding grid-reference number. “Area Control” is an administrative rather than a functional sequence. The Technocracy Study Course specifies what that means:

[An Area Control] is the coordinating body for the various Functional Sequences and social units operating in any one geographical area of one or more Regional Divisions. It operates directly under the Continental Control.

The whole system is overseen by “Continental Control” (shown as the Continental Board above) and ultimately by the “Continental Director”:

The Continental Director, as the name implies, is the chief executive [CEO] of the entire social mechanism. On his immediate staff are the Directors of the Armed Forces, the Foreign Relations, the Continental Research, and the Social Relations and Area Control. [. . .] The Continental Director is chosen from among the members of the Continental Control by the Continental Control. Due to the fact that this Control is composed of only some 100 or so members, all of whom know each other well, there is no one better fitted to make this choice than they.

To be clear: each entire continent—a Technate—is controlled by a self-appointed body which selects its great leader—the Continental Director—from within its own ranks. This self-appointed body controls everything in the Technate.

These early technocrats were supposedly trying to devise a classless system that would provide “lives of abundance” for all. Musk’s words often echo the specific meanings defined by Technocracy Inc. When, for instance, Musk spoke of “an age of abundance,” he was referring to Technocracy. Unfortunately, the original technocrats purported aspirations for a classless society appear to have been inspired either by unimaginable evil or hapless naïveté. Take your pick!

For example, 1930s technocrats viewed all crime simply as a product of the inequality inherent in the capitalist Price System; we’ll cover the “Price System” in a moment. Because technocrats looked upon the “human animal” as little more than a behavioural automaton, they either chose to ignore or didn’t even recognise—let alone account for—other possible motivations for crime besides economic inequality, such as megalomania. Consequently, power-hungry people like the Rockefellers, who recognised that there are other incentives for human behaviour besides practical necessity, viewed Technocracy in terms the technocrats could either barely comprehend or decided to ignore.

The technocrats’ seemingly woeful grasp of the human sciences led them to imagine a Technate that would enable some kind of spontaneous order to emerge—”spontaneous natural priority,” they called it. They rejected the principle that “all men are created equal”—largely, it seems, because they didn’t understand it. In their minds, it had “no basis in biologic fact.”

Upon analysing the behaviour of cow herds and chicken flocks, the technocrats identified a pecking order—from which they derived so-called “peck-rights”—as an explanation to justify the totalitarian, hierarchical social mechanism they were advocating for humans:

Certain individuals dominate, and the others take orders. These dominant ones need not be, and frequently are not, large in stature [referring to cattle and domestic fowl], but they dominate just as effectively as if they were. [. . .] The greatest stability in a social organization would be obtained where the individuals were placed as nearly as possible with respect to other individuals in accordance with ‘peck-rights,’ or priority relationship which they would assume naturally. [. . .] There must be as far as possible no inversion of the natural ‘peck-rights’ among the men.

Regardless of the intentions of technocrats who first designed Technocracy, the appeal of this system for oligarchs is obvious. Technocracy constructs a “social mechanism,” controlled by those who claim “peck-rights,” specifically engineered to facilitate the ultimate form of totalitarianism.

As mentioned above, citizens of the Technate are described as “human animals” and are viewed as programmable machines. The scientific operation of the social mechanism—Technocracy—enables the “service” (labour) of the “human animal” to act as the “human engine” for the efficient operation of the various Functional Sequences.

The technocrats flatly rejected concepts such as the human “mind” and “conscience” and “will.” These constructs, they said, belonged to humanity’s “ignorant, barbarian past.” To them, a human being was nothing more than an “organic machine” that makes a certain variety of “motions and noises,” similar, according to the technocrats, to a dog or a vehicle.

As explained in the Technocracy Study Course, the Technate would maximise the “efficiency” of the Technate by socially engineering—behaviourally controlling—the “human animal”:

Practically all social control is effected through the mechanism of the conditioned reflex. The driver of an automobile, for instance, sees a red light ahead and immediately throws in the clutch and the brake, and stops. [. . .] If they are taken young enough, human beings can be conditioned not to do almost anything under the sun. They can be conditioned not to use certain language, not to eat certain foods on certain days, not to work on certain days, not to mate in the absence of certain ceremonial words spoken over them, not to break into a grocery store for food even though they may not have eaten for days.

Tying this terrifying oppression together was a new monetary system designed to tackle the problems the technocrats saw with the capitalist “Price System.” Much like the proponents of Socred, the technocrats viewed the inequality of wealth and resource distribution as a major problem.

The capitalist “Price System” was thought “wasteful” and therefore unacceptably “inefficient,” largely because the “money” used to measure prices was generated by bank lending (debt). The technocrats referred to fiat currency as a “generalized debt certificate.”

The technocrats therefore determined that the capitalist “Price System” inevitably led to both class inequality and conspicuous consumption as the holders of the debt accrued more wealth than anyone else. Conspicuous consumption, in turn, led to the inefficient allocation of resources into pointless production, expenditure, and vanity projects. So, they proposed a new monetary system based upon the energy cost of production.

Corresponding “Energy Certificates” would better reflect productive work done, as opposed to wasteful credit (debt) consumed, because “energy is measurable in units of work—ergs, joules, or foot-pounds.” Thus, Energy Certificates could be equitably distributed—by the Distribution Sequence—across the Technate, based on the energy required to perform the function.

The technocrats recognised that some functions require more energy than others. The Transportation Sequence construction of a new railroad would require more energy than a single “human animal” working on constructing that railroad. The Distribution Sequence would manage the resultant “fair” allocation of Energy Certificates:

[E]nergy can be allocated according to the uses to which it is to be put. The amount required for new plant, including roads, houses, hospitals, schools, etc., and for local transportation and communication will be deducted from the total as a sort of overhead, and not chargeable to individuals. After all of these deductions are made, [. . .] the remainder will be devoted to the production of goods and services to be consumed by the adult public-at-large. [. . .] Thus, if there be available the means of producing goods and services [. . .] each person would be granted an income[.]

Put another way (with quote marks around Technocracy’s words): “If” there are remaining means, after those with sufficient “peck-rights” have taken the resources they need for their function—”a sort of overhead”—the “remainder” would be allocated “fairly” to the “human animals” and considered sufficient for them to perform their function.

Each issued Energy Certificate would be non-tradable and could be used only for the purchase of resources, goods, and services provided by Continental Control within the Technate.

The Distribution Sequence would record the details of every group or individual to whom the Energy Certificates were allocated and would then monitor how that Energy Certificate was used.

The degree of centralised control inherent in Technocracy is almost beyond imagination:

[O]ne single organization is manning and operating the whole social mechanism. This same organization not only produces but distributes all goods and services. Hence a uniform system of record-keeping exists for the entire social operation, and all records of production and distribution clear to one central headquarters. Tabulation of the information [contained on the Energy Certificates] provides a complete record of distribution, or of the public rate of consumption by commodity, by sex, by regional division, by occupation, and by age group.

With Energy Certificates allocated to the individual and recording all their personal details, the surveillance state is complete. Continental Control will have oversight over every citizen and will be able to monitor and control whatever they buy and wherever they go. In other words, in a Technocracy, all human behaviour is watched and rationed.

Despite their expressed aversion to the capitalist Price System, the technocrats were not antagonistic to the accumulation of wealth. They simply redefined wealth in their own technocratic terms.

In 1933, the authors of the Technocracy Study Course also published their Introduction to Technocracy, in which they wrote:

Technology has introduced a new methodology in the creation of physical wealth. [. . .] Physical income within a continental area under technological control would be the net available energy in ergs, converted into use-forms and services over and above the operation and maintenance of the physical equipment and structures of the area. [. . .] This method of producing physical wealth and measuring its operation precludes the possibility of creating any kind of debt.

Usury—that is, the issuance of nearly all fiat currency as debt repayable with interest—is undoubtedly a key instrument with which today’s oligarchs amass wealth, which they then convert into sociopolitical power. It is useful to note that the word “wealth” means “prosperity in abundance of possessions or riches.” “Riches” implies “an abundance of means.” The etymology of the word “means” defines it as “resources at one’s disposal for accomplishing some object.”

Technocracy places all resources under the command and control of a select few, who are then free to accomplish whatever objective they desire—across an entire continent—by rationing all resources to whomever they choose, whenever they wish, as they see fit. In a Technocracy, the “select few” who have “peck-rights” over and above everyone else do not need monetary wealth. Technocracy promises to deliver the zenith of Aristotelian oligarchy.

To say Technocracy is radical would be a massive understatement. We think in terms of political “isms,” but words like “communism,” “fascism “or “feudalism” don’t come close to describing the extent of the radical tyranny intrinsic to Technocracy.

In 1965, Technocracy Inc. published a written exchange between its founder, Howard Scott, and assistant professor of economics J. Kaye Faulkner. The conversation was later re-released under the title The History and Purpose of Technocracy.

Scott wrote to Faulkner:

Technocracy has always contended that Marxian political philosophy and Marxian economics were never sufficiently radical or revolutionary to handle the problems brought on by the impact of technology in a large size national society of today. [. ..] We have always contended that Marxian communism, so far as this Continent is concerned, is so far to the right that it is bourgeois. It is well here to bear in mind; the technological progression of the next 30 minutes invalidates all the social wisdom of previous history. [. . .] Technology has no ancestors in the social history of man. It creates its own.

As Scott’s words indicate, the technocrats foresaw that the rapid advance in technology would inevitably present both immense opportunities and risks. In an effort to mitigate the risks, the technocrats’ proposed solution was to embrace technology and purpose it to the service of more “efficient” government—i.e., a Technate.

This notion of a technological “singularity” threatening to surpass humanity’s ability to adapt would later inspire the perhaps even more radical political philosophy of the accelerationist neoreactionaries. There are many commonalities between the two sociopolitical theories.

Technocracy, both then and now, is literally inhuman. It elevates technological development above morality. As Taylor made clear, “the system must be first.”

People like Elon Musk and Jeff Bezos want to install a Technocracy and live in it—or at least make us live in it. Why? Do they hope we will all live “lives of abundance” under Technocracy? Or do they envisage themselves as elitist members of Continental Control, with a free hand to socially engineer the rest of us, whom they view as a herd of “human animals”?

What do you think?

The Accelerationist Neoreactionaries

Just as Technocracy is based upon the analysis of the “social mechanism” and the subsequent “efficient management” of “Functional Sequences,” so the Dark Enlightenment—also known as the neoreactionary movement (NRx)—is based upon the deconstruction and redistribution of power held by the real ruling entity. The neoreactionaries called this entity “the Cathedral.”

Once the “administrative, legislative, judicial, media, and academic privileges” of “the Cathedral” are properly understood and quantified, they can be “converted into fungible shares” to be owned and traded by “sovereign corporations”—sovcorps—that will form a “patchwork” of “neostates”—neocameralist-states, to be exact—as a result of “neocameralism.”

Thus, the state can be separated from the “ruling entity”—the Cathedral—and can be run more efficiently as a corporate structure called “gov-corp.” This structure is very similar to the efficient management of the “Functional Sequences” forming the “social mechanism” suggested by Technocracy.

Admittedly, there is quite a lot to unpack here.

Building on the work of Karl Marx, in 1942 the Austrian economist Joseph Schumpeter theorised that capitalist economies constantly evolve due to the cyclical disruption caused by innovations that destroy old markets and create new ones. He popularised the term “creative destruction” to describe this theoretical economic growth process, which, he said, was fundamental to capitalism. Schumpeter emphasised that emergent technology had the potential to disrupt, overturn, and renew the associated socioeconomic and sociopolitical power enjoyed by capitalist monopolies. Therefore, creative destruction also implied a realignment of the social and political order.

During the mid-1990s, a diverse group of iconoclast scholars working out of the Cybernetic Culture Research Unit (CCRU) of Warwick University in the UK and led by the philosophers and cultural theorists Sadie Plant, Mark Fisher, and Nick Land, combined their thoughts about Schumpeter’s creative destruction with their exploration of “deterritorialization.” A product of the critical theory of the Frankfurt School, “deterritorialization” suggested that any sociopolitical “territory”—whatever it may encompass—would ultimately be altered, mutated or destroyed, only to reemerge as something else following the process of “reterritorialization.”

Considering deterritorialization an inevitability and viewing capitalist “creative destruction” as an essential sociopolitical and economic evolution, the CCRU cyberpunks (led by Fisher and Land) noted that the rapid improvements in modern computation—quantum computing, for example—enabled successive forward technological leaps at ever-shorter intervals.

A technological singularity—or simply the singularity—in which technological growth becomes self-perpetuating, was seen as unavoidable. The technological feedback loop meant deterritorialization would be automatic. It would accelerate sharply and outstrip humanity’s ability to intervene or adapt to it, according to the CCRU.

Therefore, the task before society is to either adapt or die. Adapting means that creative destruction of capitalism must be embraced and intensified—not just because it is a socioeconomic phenomenon but because it is a desirable “schema” to implement. The creative destruction of social, economic and political systems is a proposed survival strategy that itself needs to accelerate to keep pace with the inevitable deterritorialization as we speed towards the singularity—or some other apocalypse.

In his 1967 novel Lord of Light, American science fiction writer Roger Zelazny depicted revolutionaries who wanted to rapidly transform their society by enabling greater public access to technology. Zelazny called his fictional revolutionaries “accelerationists.” The term was subsequently popularised by professor of critical theory Benjamin Noys. Note: This was prior to Nick Land labelling his interpretation of Schumpeter’s creative destruction “accelerationism.”

In 2016, Land explained:

Deterritorialization is the only thing accelerationism has ever really talked about. [. . .] In this germinal accelerationist matrix, there is no distinction to be made between the destruction of capitalism and its intensification. The auto-destruction of capitalism is what capitalism is. “Creative destruction” is the whole of it [. . .]. Capital revolutionizes itself more thoroughly than any extrinsic ‘revolution’ possibly could.

Leading CCRU figures Nick Land and Mark Fisher in the UK and, notably, Curtis Yarvin in the US were part of the growing neoreactionary movement (NRx). Neoreactionaries fall on both the left and the right of the traditional political divide, but all neoreactionaries are accelerationists.

The associated term “accelerator” has certainly caught on. In 2011, researchers from the UK business and innovation “charity” Nesta published a discussion paper in which they noted the rapid rise of “accelerator” programmes, starting in the US and subsequently spreading to Europe and beyond:

The number of accelerator programmes has grown rapidly in the US over the past few years and there are signs that more recently, the trend is being replicated in Europe. From one accelerator programme, Y Combinator in 2005, there are now dozens in the US that are funding hundreds of startups per year. There have already been a number of high-profile startup successes from accelerator programmes.

Now 20 years old, Y Combinator (YC) applied the accelerationist approach to venture capitalism. Notable successful start-up ventures followed. Stripe, Coinbase, and Dropbox were among YC’s winners. In 2011, Peter Thiel protégé Sam Altman (who, alongside Thiel, Musk and others, co-founded OpenAI) joined YC and in 2014 became its president.

Besides the US government, the UK government and EU members states have fully embraced accelerationism. The UK government, for example, runs numerous accelerators.

Accelerationism has been conspicuously used to develop defence and surveillance technology. Consider the D3 accelerator which is reportedly “entirely focused on military-related startups.” Initially focusing in Ukraine, the “Dare to Defend Democracy” (D3) accelerator is a public-private partnership that adopts the accelerationist approach to startups focusing exclusively on AI enabled intelligence, cybersecurity, and military technology.

The D3 accelerator’s leading investors include former Google CEO Eric Schmidt. Together with Peter Thiel, Elon Musk, and other investors in AI solutions, they have combined to use the Ukrainian battlefield as a test bed. In addition, Thiel’s Palantir and Musk’s Starlink experimentation collaborated with the Pentagon to develop Project Maven. The project deploys AI to rapidly analyse vast amounts of data to generate automated targetting. Accelerationism’s influence on public-private AI start-ups in the defence sectors on both sides of the Atlantic is already significant. We’ll explore this further in Part 2.

But, for all its winners, the accelerationist approach also creates many losers we never hear about.

[A]ccelerators typically provide services through a highly selective, cohort-based programme of limited duration (usually 3–12 months). Services often include assistance in developing the business plan, investor pitch deck, prototypes, and initial market testing. [Accelerators] base their business model on equity from the startups. This means that they are more growth driven, typically aiming to produce companies that will scale rapidly or fail fast, thus minimising wasted resources.

This selective, high-impact, creative destruction-based model of venture capitalism covers its potential losses by seizing equity from the start. The start-ups that don’t make it are left with nothing. Their investors seek to recoup what they can.

The Cathedral

Writing under the pen name Mencius Moldbug between 2007 and 2014, Curtis Yarvin published a series of essays in which he laid out his various “UNQUALIFIED RESERVATIONS” (a title that runs across the bottom of each essay).

In 2014, Yarvin took a break from writing as Moldbug to focus on his business interests, with Thiel’s assistance. In 2013 he received start-up funding from Thiel for his company Tlön and its Urbit platform, a decentralised peer-to-peer (P2P) network technology company. (Note: Yarvin shifted his focus back to writing in May 2020, issuing an announcement that he was partway through his book, Gray Mirror Of The Nihilist Prince.)

Yarvin (as Moldbug) identified what he called “the Cathedral” as the primary target for creative destruction. Fellow neoreactionary Michael Anissimov described the Cathedral as “the self-organizing consensus of Progressives and Progressive ideology represented by the universities, the media, and the civil service. [. . .] The Cathedral has no central administrator, but represents a consensus acting as a coherent group that condemns other ideologies as evil.” In other words, the Cathedral is not a formal structure of the state but rather the dominant progressive ideology of those exercising a controlling influence over the state.

In essence, the neoreactionaries view “the Cathedral” as the governance effect of the belief system maintained by the Establishment—the ruling class. Yarvin observed that the Cathedral prevails as an informal “institution rather than a person.” Thus, he argued, traditional approaches to political reform were useless. The real ruling entity, he reasoned, existed more as a shared ideology and as a resultant set of agreed-upon objectives held by a dominant class than as an identifiable political structure:

[T]he power structures that bind the Cathedral to the rest of the Apparat [bureaucracy] are not formal. They are mere social networks. [. . .] [T]here is nothing you can do about this structure. You can’t prevent people from emailing each other.

The NRx claims that the Cathedral champions modern, left-leaning progressivism. The fact that there is very little evidence of any Establishment commitment to egalitarian social reform is just one of many glaring errors and woeful assumptions littered throughout neoreactionary political philosophy and accelerationism more broadly. We’ll cover the most egregious errors and assumptions shortly.

While progressive mores are frequently touted by members of the Establishment, this is evidently a perception management tactic and part of social engineering. The Establishment likes to be seen as progressive and certainly prefers that we adopt progressive values, but there is no evidence that the Establishment conducts itself in keeping with progressive ideology. Nonetheless, there is truth to Curtis Yarvin’s observation that the Cathedral, expressed in neoreactionary terms, “does not wish to relinquish power.”

The NRx uses the word “democracy” when referring to “representative democracy.” Yet “democracy” and “representative democracy” are two separate, distinct, and almost diametrically opposed political systems. Representative democracy is based on every sovereign individual devolving all of their decision-making “authority” to a select few elected politicians, whereas “democracy” sees every sovereign human being retaining and exercising their own sovereign authority through the rule of law.

This confusion of definitions is a common NRx error. So common, in fact, one has to wonder if it is simply an “error” or a deliberate obfuscation. Whatever the case, the NRx is right to highlight the near-religious zealotry with which said Cathedral extols so-called “democracy.” By declaring representative democracy righteous, the NRx contends that the Cathedral establishes what is effectively a moral dictatorship.

Yarvin wrote:

The real problem is that, as a political form, democracy is more or less a synonym for theocracy. (Or, in this case, atheocracy.) Under the theory of popular sovereignty, those who control public opinion control the government.

As “democracy” hinders the necessary creative destruction and is propelling humanity like lemmings towards the cliff-edge of the singularity, axiomatically democracy must be destroyed and a better form of government—a kind of corporate monarchy—installed, per Yarvin:

The only way to escape the domination of canting, moralizing apparatchiks [the Cathedral and its acolytes] is to abandon the principle of vox populi, vox dei, and return to a system in which government is immune to the mental fluctuations of the masses.

Cameralism can be described as the science of public administration. It perceives the state as a business that runs a country. Cameralism unfolded in Europe during the 18th and 19th centuries, as large, centralised states emerged. The systematic gathering and analysis of statistical data became increasingly important for state administrators and planners.

Cameralism breaks the function of the state into three parts: (1) public finance (cameral), (2) the administration of order, and (3) oeconomie. The latter determines the relationship between state and society. It is social engineering using economics and other tools. Cameralism, in all its functions, serves the efficiency of the state.

The neocameralism of the NRx applies cameralism to the Cathedral. The envisaged post-neocameral state, in which the government is “immune to the mental fluctuations of the masses,” can best be realised, or so say the neoreactionaries, by converting the state into a corporate structure.

Yarvin explained it this way:

Let’s start with my ideal world — the world of thousands, preferably even tens of thousands, of neocameralist city-states and ministates, or neostates. The organizations which own and operate these neostates are for-profit sovereign corporations, or sovcorps.

The Dark Enlightenment

French philosopher Gilles Deleuze (1925–1995) and French psychoanalyst and political activist Félix Guattari (1930–1992), who wrote a number of works together, argued that while capitalism set free the acquisition and distribution of resources, its architects were highly territorial, tending toward monopoly, which ultimately resulted in capitalism bringing “all its vast powers of repression to bear.” Therefore, they argued, “deterritorialization” was essential. As capitalism was inherently self-destructive, the task, they said, was to “accelerate the process.”

Echoing the “conspicuous consumption” theories of Veblen, French philosopher and sociologist Jean-François Lyotard posited that consumerist workers in modern capitalist societies did not want emancipation. Their materialistic desires meant they enjoyed “swallowing the shit of capital,” Lyotard wrote.

Building on these theories and pushing the concepts presented by Mencius Moldbug (Yarvin) to the maximum, former CCRU leader Nick Land published “The Dark Enlightenment“ in 2012. If Technocracy is inhuman, Dark Enlightenment borders on psychopathic.

Land contended that the postmodern tenets of liberal democracy—by which he meant liberal “representative democracy”—created an inescapable sociopolitical “vector” that would inevitably lead to a “new dark age” as “Malthusian limits” would unavoidably “brutally re-impose themselves.” Only an accelerationist neoreaction could avert the inevitable totalitarian catastrophe.

Land continued:

For the hardcore neoreactionaries, democracy is not merely doomed, it is doom itself. Fleeing its approaches is an ultimate imperative. The subterranean current that propels such anti-politics is recognizably Hobbesian, a coherent dark enlightenment, devoid from its beginning of any Rousseauistic enthusiasm for popular expression.

By agreeing to Rousseau’s “social contract” myth, propagated by the Cathedral, everyone condemned themselves to “democratic politics,” Land argued. The result of “democratization” is a capitalist “sovereign power” that runs the state to everyone’s detriment and to seemingly inescapable corruption:

[T]he dynamics of democratization [are] fundamentally degenerative: systematically consolidating and exacerbating private vices, resentments, and deficiencies until they reach the level of collective criminality and comprehensive social corruption. The democratic politician and the electorate are bound together by a circuit of reciprocal incitement, in which each side drives the other to ever more shameless extremities of hooting, prancing cannibalism, until the only alternative to shouting is being eaten.

Land highlighted the accelerationist view that the Cathedral assumes a postmodern “central dogma” and, as a result, maintains a misplaced “absolute moral confidence.” Unquestioningly accepted by the brainwashed public, the “secularised neo-puritanism of the Cathedral” deifies the “evangelical state.” Consequently, all opposition to it is deemed heresy. Land argued that nothing could be more intolerant of dissenting views or less inclusive.

The problem with the Cathedral, Land declared, was that while technology was capable of “accelerating development,” the “rent-seeking special interests”—the ruling class—who maintained the Cathedral swallowed all the benefits. There were no political solutions to this capitalist conundrum because their neo-puritan faith in so-called liberal democracy rendered populations incapable even of understanding, let alone tackling, the overwhelming power of the Cathedral. Land considers this a societal mental disorder that Yarvin called “demosclerosis”—an intransigent, self-destructive faith in the Cathedral.

The Cathedral had integral morbidity, and post-WWII globalization had spread the sickness. To maintain demosclerosis, the Cathedral’s only solution was to consume ever more to retain the neo-puritanical beliefs of the faithful. Land called this condition “modernity 1.0.” It necessitated the constant expansion into new markets, to the point where Land predicted that the “Eurocentric” model would be abandoned. Anglo-American power would thus be diffused as the Cathedral sought to roll out “modernity 2.0.”

Writing in 2012, Land said:

Modernity 2.0. Global modernization is re-invigorated from a new ethno-geographical core [the East], liberated from the degenerate structures of its Eurocentric predecessor, but no doubt confronting long range trends of an equally mortuary character. This is by far the most encouraging and plausible scenario (from a pro-modernist perspective), and if China remains even approximately on its current track it will be assuredly realized.

The Dark Enlightenment suggests that modernity 2.0 merely postpones the inevitable failure to adapt to the singularity. A true “Western Renaissance” could only be realised with the demise of the extant global Cathedral. Therefore, every crisis should be accelerated and exacerbated in an attempt to break the Cathedral’s hold:

To be reborn it is first necessary to die, so the harder the ‘hard reboot’ the better. Comprehensive crisis and disintegration offers the best odds. [. . .] Because competition is good, a pinch of Western Renaissance would spice things up, even if — as is overwhelmingly probable — Modernity 2.0 is the world’s principal highway to the future. That depends upon the West stopping and reversing pretty much everything it has been doing for over a century, excepting only scientific, technological, and business innovation. [Emphasis added.]

Observe that, from the neoreactionary perspective, “scientific, technological, and business innovation” are the only valuable Cathedral attributes. As neoreactionaries incorrectly think sovereignty implies nothing more than the power to exert authority over another and as the Cathedral possesses the ultimate alleged “sovereignty,” neocameralism can be used to audit Cathedral sovereignty and thereby run the state more effectively.

While the word “sovereignty” certainly implies “superiority,” the libertarian concept of self-ownership, or individual sovereignty, is more than just ignored by the accelerationist NRx. It is wholeheartedly rejected. The proponents of the Dark Enlightenment describe themselves as libertarians, but are using that term in a bizarre sense.

Land at least acknowledged the existence of a ruling class, but the Dark Enlightenment is based on the misconception that oligarchs simply pay for political favours. Once the oligarchs’ path to monetary bribery is removed, they can safely be ignored:

[T]he ruling class must be plausibly identified. [. . .] It is [only] necessary to ask [. . .] who do capitalists pay for political favors, how much these favors are potentially worth, and how the authority to grant them is distributed. This requires, with a minimum of moral irritation, that the entire social landscape of political bribery (‘lobbying’) is exactly mapped, and the administrative, legislative, judicial, media, and academic privileges accessed by such bribes are converted into fungible shares.

Thus, the useful “functions”—or “chambers,” in neocameralist terms—of the Cathedral can be “mapped” and converted into freely transferable shareholdings.

Yarvin suggested breaking nations into neostates run by the shareholders of sovereign corporations—sovcorps. Land, perhaps adopting a more traditional cameralist position, envisaged converting the entire nation into a business enterprise run by gov-corp:

The formalization of political powers [. . .] allows for the possibility of effective government. Once the universe of democratic corruption is converted into a (freely transferable) shareholding in gov-corp, the owners of the state can initiate rational corporate governance, beginning with the appointment of a CEO. As with any business, the interests of the state are now precisely formalized as the maximization of long-term shareholder value.

In a practically identical fashion to Technocracy, the Dark Enlightenment proposes dictatorship. Instead of a Continental Director of Continental Control, it advocates for a CEO of gov-corp. It is still a select few who rule with absolute authority and impunity.

Obviously, there is no democratic accountability of any kind—not even representative democratic accountability—under the totalitarian rule of gov-corp. Indeed, politicians and politics would become obsolete. Nevertheless, like the technocrats, the accelerationist neoreactionaries were, in their own seemingly naïve way, trying to address government corruption and its impacts.

In the Dark Enlightenment, gov-corp would act as a service provider of effective government. Citizens would become its “customers.” They could therefore expect value for their money, and they could make a complaint if they were dissatisfied:

If gov-corp doesn’t deliver acceptable value for its taxes (sovereign rent), they can notify its customer service function, and[,] if necessary[,] take their custom elsewhere. Gov-corp would concentrate upon running an efficient, attractive, vital, clean, and secure country, of a kind that is able to draw customers.

It is difficult to know where to start criticising this absurd idea. Whether they are called “sovereign rents” or “taxes,” no one chooses to pay them. The notion that a customer “buys” a service implies that they are equally free to choose not to buy it. Yet the only choice offered by the NRx’s gov-corp is to either pay up or get out. As Land puts it, absent politics of any kind, “no voice, free exit.” For billions of people this is not remotely possible.

The neoreactionaries’ appreciation of oligarchy is monumentally facile. Land openly acknowledges that the proposed “owners of the state” are those who would have sufficient means to “buy out” the Cathedral’s existing “stakeholders”—that is, its “owners.” So, who does he imagine will run gov-corp but the oligarchs who already “own” the state? Gov-corp does not challenge the “ruling class.” Instead, it hands total control of society and state over to the “ruling class” on a gold platter.

Citizens can already make a complaint to government through a variety of mechanisms, including lobbying, petitions, protest, and other forms of activism. Elections make no difference precisely because government is always corrupted by oligarchs who, while they sometimes squabble, essentially agree on the direction they want humanity to head. To be honest, the other existing routes of complaint don’t really work either, for more or less the same reason.

The Dark Enlightenment solution to this accurately identified problem is to “formalise” every avenue of dissent and sell it off to oligarchs, who are trusted by the neoreactionaries to operate a fair and just “customer service function.” This is not a plausible solution of any kind from humanity’s perspective.

There is every reason to suspect that this so-called solution is an attempt to mollify fools and convince them to buy into the Dark Enlightenment. Frankly, humanity is despised by the neoreactionaries, who wish to see it entirely dispossessed.

The Cathedral would hold nearly all “sovereignty,” but the share of “sovereignty” held by regular humans would be negligible. Rather than address this logical conclusion, however, the Dark Enlightenment treats human beings as practically irrelevant. As Land sees it:

Insofar as voters are worth bribing, there is no need to entirely exclude them from this calculation, although their portion of sovereignty will be estimated with appropriate derision.

Land’s eugenical tendency is obvious when he claims that “people are, on average, not very bright.” Since, in Land’s eyes, the citizenry is worth so little and their share of sovereignty is practically nil, it is best to treat them as the largely clueless customers of gov-corp. In light of looming singularity, the question, according to Land, is how to maximise the useful function of these customers in order extract the appropriate “sovereign rent” from them.

His suggestion is that we should all become “technoplastic beings.” This will make us “susceptible to precise, scientifically informed transformations.”

Land writes:

‘Humanity’ becomes intelligible as it is subsumed into the technosphere, where information processing of the genome — for instance — brings reading and editing into perfect coincidence. To describe this circuit, as it consumes the human species, is to define our bionic horizon: the threshold of conclusive nature-culture fusion at which a population becomes indistinguishable from its technology.

Essentially then, in accordance with the Dark Enlightenment, the accelerationist solution to humanity’s ills is to end humanity.

Once we are “technoplastic beings”—transhuman cyborgs—in a world where “biology and medicine co-evolve,” we will cross the “bionic horizon,” as Land calls it. At that point, we can finally kill God and abandon the “essence of man as a created being.” We will be free to sacrifice our humanity and embark upon our “new evolutionary phase.”

As valued customers who are rendered intelligible only by melding with technology, we can all prostrate ourselves and our children before the sovereignty of gov-corp. Under the watchful eye of our illustrious CEO, we can be programmed as required. The result? Finally, at long last, we will have an effective government. After all, “the system must be first.”

The Accelerationist Left

In 2008, two Canadian left-leaning neoreactionaries, Alex Williams and Nick Srnicek, published the #ACCELERATE MANIFESTO for an Accelerationist Politics. In this treatise, the pair were responding to Mark Fisher’s thoughts on “capitalist realism.” (The following year, Fisher turned those thoughts into a book called Capitalist Realism: Is There No Alternative.) Fisher had observed that, after the Soviet Union collapsed, no viable political-economic alternative to capitalism had been offered. Probably quoting Slavoj Žižek, Fisher had written, “[I]t is easier to imagine an end to the world than an end to capitalism.”

Fisher argued that the left had failed to challenge neoliberalism, which he described as a separate but reinforcing component of modern capitalism. Considering the inequities wrought by neoliberalism, Fisher urged the left to embrace an accelerationist approach to capitalism. He identified neoliberalism, rather than progressivism, as the founding faith binding what Land and Yarvin called “the Cathedral.”

Like his counterparts on the right, Fisher contended that technological growth was unstoppable. He argued that the traditional left’s attempt to recreate a socialist society without accounting for the homogenising effect of modern technology was an act of futility. If the hope was to make meaningful use of progressive political theory, the left needed to embrace capitalist realism and deploy accelerationism to creatively destroy and “deterritorialize” neoliberalism to ensure a progressive, post-capitalist reterritorialization.

In their #ACCELERATE MANIFESTO, Williams and Srnicek accepted capitalist realism and said:

In this project, the material platform of neoliberalism does not need to be destroyed. It needs to be repurposed towards common ends. The existing infrastructure is not a capitalist stage to be smashed, but a springboard to launch towards post-capitalism.

Applying neocameralism to neoliberalism, they added:

[T]he left must take advantage of every technological and scientific advance made possible by capitalist society. We declare that quantification is not an evil to be eliminated, but a tool to be used in the most effective manner possible. Economic modelling is — simply put — a necessity for making intelligible a complex world. [. . .] The tools to be found in social network analysis, agent-based modelling, big data analytics, and non-equilibrium economic models, are necessary cognitive mediators for understanding complex systems like the modern economy. The accelerationist left must become literate in these technical fields.

As accelerationist leftists who are pursuing a progressive future, the co-authors advocate a “sociotechnical hegemony” to ensure that “production, finance, logistics, and consumption” are “reformatted towards post-capitalist ends.” They promote public-private partnership—stakeholder capitalism. And they believe that “governments, institutions, think tanks, unions, or individual benefactors” should work together to create “an ecology of organisations, a pluralism of forces.”

This “ecology” of public and private institutions could, Williams and Srnicek envisioned, create “a new ideology, economic and social models, and a vision of the good” and design new “institutions and material paths to inculcate, embody and spread them.” Working together, this partnership of stakeholders would construct “a positive feedback loop of infrastructural, ideological, social and economic transformation, generating a new complex hegemony, a new post-capitalist technosocial platform.”

It is somewhat humorous that, despite all their talk of a “sociotechnical hegemony,” the accelerationist left has been divided from the neoreactionary right by the same old disagreements—not to mention some degree of animosity. Harshly critical of Land in particular, Williams and Srnicek described Land’s inhuman model of accelerationism as “a simple brain-dead onrush,” whereas their own model promises a more human-centred “navigational” accelerationism.

Any human being who would like to see future generations of humanity thrive would be hard-pressed to choose either the #ACCELERATE MANIFESTO or the Dark Enlightenment. Both are deeply rooted in transhumanism. Instead of being programmed to be good customers of gov-corp, we’d be programmed to be outstanding progressives under sociotechnical hegemony. Of the latter, Williams and Srnicek write:

Any transformation of society must involve economic and social experimentation[,] [. . .] fusing advanced cybernetic technologies [. . .] with sophisticated economic modelling [. . .] and a democratic platform instantiated in the technological infrastructure itself, [. . .] employing cybernetics and linear programming in an attempt to overcome the new problems. [. . .] The left must develop sociotechnical hegemony: both in the sphere of ideas, and in the sphere of material platforms. Platforms are the infrastructure of global society. They establish the basic parameters of what is possible, both behaviourally and ideologically.

In truth, accelerationist neoreaction, on both the left and the right, outlines nothing other than a future technological and sociopolitical dystopia. There is absolutely no reason to imagine that hegemony of any kind is capable of delivering anything but tyranny. Like the technocrats, the accelerationist neoreactionaries seem equally unable to grasp that there will always be megalomaniac oligarchs set on “accomplishing some object,” no matter how deranged their objective may be.

Disillusionment with representative democracy is no reason to hand over totalitarian sociopolitical control systems to oligarchs. Accelerating towards hegemony is not a solution. Unless you are an oligarch, it is a stupid and suicidal proposition.

Neither Technocracy, accelerationism nor the Dark Enlightenment exist within our familiar political paradigms. They are so far outside the Overton window that we can’t even discuss them without either being embroiled in pointless and redundant debates about whether they are communist or fascist or being subjected to eye-rolling scorn.

To be frank, it makes little difference what we hoi polloi believe. The oligarchs who are conversant with these political philosophies are evidently trying to bring them to fruition in our lifetime. We ignore the consequent cultural revolutions and social engineering projects at our peril. Make no mistake: They are already underway.

Consider Land’s darkly enlightened determination that we must reject “any Rousseauistic enthusiasm for popular expression”—the common perception of the “social contract.” We are now seeing his objective transition into [public] policy.

President Trump has come to power backed by technocrats like Elon Musk and neoreactionaries like Peter Thiel. One of Trump’s first acts as president was to announce a $500 billion public-private infrastructure investment project called “Stargate.” The aim is to construct the data centre and power generation capacity needed for the development and rollout of artificial intelligence (AI) systems.

The Stargate public-private consortium brings the US government into a partnership with OpenAI, Oracle, and Softbank. Thiel’s protégé, Sam Altman, is the CEO of OpenAI. Speaking shortly after Trump’s announcement, Altman made a statement thick with Aesopian language. He told reporters:

I think technology does a great deal to lift the world to more abundance and to better prosperity. [. . .] I still expect that there will be some change required to the social contract. [. . .] [T]he whole structure of society itself will be up for some degree of debate and reconfiguration.

Darkly Enlightened Christianity

Irrespective of the various religious rites practiced by different Christian denominations or of the sectarian divisions to which they give rise, the unifying values of all genuine Christians—love, compassion, humility, integrity, and justice—are easy to appreciate and respect.

But right-leaning members of the neoreactionary movement, including Yarvin and Land, take exception to what they consider a progressive translation of those Christian values. Consequently, self-proclaimed Christian neoreactionaries have adopted a warped reinterpretation of the traditional Christian values most of us recognise.

“Universalism” is a Christian theology that preaches the doctrine of universal reconciliation with God. Christian Universalism maintains that anyone—Christian or not, saint or sinner—can find salvation through Jesus Christ. Universalism often holds that there is no permanent damnation to Hell because “the Lord will not cast off forever.”

The theology of Universalism is aligned with Mainline Protestantism, which emphasises social justice and personal salvation and offers more liberal and progressive interpretations of scripture. Yarvin attacks Christian Universalism as an extreme form of Calvinism, which, he says, dictates that “all dogs go to Heaven and there is no Hell.” His objection is to the inference that “everyone is part of the elect.”

The belief that we are all equally deserving of grace is contrary to the dogma of the neoreactionary right. Remember, the NRx proclaims that humanity’s “portion of sovereignty” is worthy only of “derision.”

Consequently, the NRx neologise “Universalism” to mean the synthesis between “the mainline Protestant and secular Nationalist movements.” Yarvin argues that US secular nationalism has become “internationalism”—globalism—and that “nationalism” has consequently become “an inappropriate term.”

The neoreactionaries reference an article published in Time magazine in 1942, titled “Religion: American Malvern” as alleged proof that progressive liberal theology has mutated and merged with progressive, political globalism. This is considered to be to the detriment of both Christian beliefs and nationalism. Though the article links the political corruption of the church in the US with globalists like John Foster Dulles, it does not demonstrate that Christian theology and progressive political ideology are intertwined.

Nonetheless, as the Cathedral is defined as the supposed dominant progressive ideology of the ruling class, Yarvin concludes that political progressivism is a “sect of Christianity”—and not a sect he embraces.

Frankly, this appears to be little more than linguistic trickery. Other than the fact that reform is common to both political progressivism and theological liberalism, the neoreactionaries’ suggested marriage of the two seems tenuous. It is almost impossible to follow Yarvin’s and Land’s reasoning, to the point where many have questioned if there is any.

Yarvin insists that modern Christianity itself has become a core component of the “nontheistic sect” of NRx-defined Universalism—the neo-puritanical faith in the Cathedral. Consequently, according to the NRx, the neoreactionaries who oppose Universalism are viewed as literal heretics by the neo-puritan acolytes of the Cathedral—that is, everyone who is not a neoreactionary.

Yarvin rejects this notion and sees those who embrace liberal theology—progressivism—as the true heretics. It is the NRx, he posits, that seeks to restore the true Christian faith:

If a Christian who believes his or her faith is justified by universal reason is a Universalist, a Christian who believes his or her faith is justified by divine revelation—in other words, a “Christian” as the word is commonly used today—might be called a Revelationist.

For NRx Christians like Peter Thiel, imposing gov-corp and removing the stultifying influence of the progressive Universalism is the Christian thing to do. In their view, the true revelation is that “real” Christians reject liberal theology and hold to a more literal reading of scripture. Combined with his sociopolitical philosophy, this theology has evidently led Thiel, and presumably others who share his faith, to adopt supposed Christian values most of us would struggle to recognise as Christian.

Today, the TechnoKings—such as Y Combinator CEO Garry Tan—and many of the leading lights in the Mainstream Alternative Media (MAM)—are more openly discussing and promoting their Christian faith. Take Russell Brand, for example. Brand’s proselytising is popular on the Thiel-backed Rumble video-sharing platform, where many MAM heavyweights have prospered.

As noted by the UK’s Christian Today, Hulk Hogan, Shia LaBeouf, Rob Schneider, Kat Von D, Candace Owens, and Ayaan Hirsi Ali are also among the many celebrities and “talking heads” to have very conspicuously converted to Christianity (mainly Catholicism) in recent months. Before we assume this indicates a resurgence in Christian values, perhaps we should first look at what those values might be.

It is tempting to see the fashion for openly advocating your Christianity as a marketing strategy, particularly in the US. The “Bible Belt” represents a sizeable demographic and usually a Republican heartland. But there is more to it.

Peter Thiel has been something of a faith leader among the TechnoKing class and has long been open about his own allegedly Christian beliefs. Thiel is also an enthusiast and former student of the philosophy of René Girard (1923–2015). His personal Christian values are evidently heavily influenced by his sociopolitical and philosophical beliefs. They diverge considerably from the Christian values we have discussed to this point.

Girard argued that people’s desire to imitate others—mimesis—led them to covet objects and services, ascribing them corresponding and often irrational value. His mimetic theory is largely consistent with Veblen’s conspicuous consumption.

When humans are driven by mimetic desire, social conflict—and ultimately violence—is inevitable as we compete for resources, Girard proffered. The conflict escalates until it becomes all-consuming and threatens to destroy society. That’s when a scapegoat becomes necessary, he argued.

Via the scapegoat mechanism, an individual or group is blamed, persecuted, and murdered. This “founding murder” unites society and returns it to a more stable condition. But the peace is precarious, for the underlying mimetic desire remains. If we follow Girard’s reasoning and assume the founding murder requires planning, we could describe the othering of the scapegoat as an archetypal psychological operation (psyop).

The founding murder facilitates cultural renewal through the process of sacralization. An accompanying mythology imbues the murdered scapegoat with great power. The scapegoat’s guilt means they had to die for society to be reborn, thereby rendering the murder a sacred act. Subsequent symbolic sacrifices, according to Girard, were reaffirmations of the cultural significance of the founding murder.

Girard converted to Catholicism in 1959 based on what he contended was an empirical philosophical approach to scripture. He identified the story of Christ Jesus’ crucifixion and resurrection as an archetypal example of a “founding murder.” The Lamb of God was the scapegoated slain victim who becomes the miraculous foundation of a new culture.

Girard viewed the resurrection of Jesus—theologically proving he was “not guilty”—as a cultural turning point in human history. It exposed the lie underpinning the scapegoat mechanism. The founding murder of Christ reveals the contradiction at the heart of human society. Its treasured “peace” is only—can only—stem from its own inherent and uncontrollable violence.

In 2003, Thiel wrote an essay titled “The Straussian Moment.” In it, Thiel challenged both the rationality of the Enlightenment and prevailing Christian theology. He argued that the founding murder “is the secret origin of all religious and political institutions.” Therefore, to maintain its Enlightened delusions and its Christian pretensions—in Girardian terms—modern society’s only option is to deceive itself by ignoring the “truth about human nature.”

Thiel criticized Enlightenment philosophers, such as John Locke, for overlooking the mimetic desires of human beings. Determining this “desire” to be a fundamental aspect of human nature, Thiel wrote: “In the place of human nature, Locke leaves us with an unknowable X.”

Thiel argued that human nature—the unknowable X—could be known and accounted for. Thus, like Yarvin, Land, and the broader NRx, Thiel rejected the alleged ambiguity of the Enlightenment:

[T]he Enlightenment undertook a major strategic retreat. If the only way to stop people from killing one another [in the name of religion or conflicting beliefs] involved a world where nobody thought about [human nature] too much, then the intellectual cost of ceasing such thought seemed a small price to pay. The question of human nature was abandoned because it is too perilous a question to debate.

Thiel finds this “lack of understanding of this truth of human culture” to be a fatal flaw. He agrees with Girard’s point that “the modern world contains a powerfully apocalyptic dimension”—mimetic desire. It is fundamentally unstable, prone to revolution, corruption, and collapse and cannot be permanent. Therefore, the Christian imperative is to acknowledge mimetic apocalypse and understand that the truth delivered by the resurrection is the real revelation of the founding murder: humanity is the problem.

In “The Straussian Moment,” Thiel presents this world view by proposing a course of action for Christian politicians who understand the “truth” about the founding murder of Christ. Once understood, violent human nature and the cyclical inevitability of apocalypse can be included in a more cohesive theology, he believes.

Christian politicians should proceed by “determining the correct mixture of violence and peace” they may need to utilise, depending on the circumstances. The task is to manage the “limitless violence of runaway mimesis” with the objective of delivering the “peace of the kingdom of God.”

It is ironic that Thiel criticises what he sees as the vagaries within Enlightenment rationality. There appears to be quite a lot of moral ambiguity in Thiel’s Christian “values.”

Over the last two decades, Thiel’s opinion has changed little. His Girardian view of mimetic apocalypse has presumably combined with his darkly enlightened conceptualisation of the singularity and shaped his personal theology. Speaking to Peter Robinson from the Hoover Institute, Thiel laid out his thoughts about the apocalypse.

Thiel said that human nature has a “limitless violence to it.” Therefore, biblical prophecies of the apocalypse really speak of what “humanity is likely to do in a world of ever more powerful technology.” Thiel agrees with René Girard that violence is not “one of God’s attributes.” Consequently, he rejects the more humanist view of the Enlightenment philosophers that humanity “is not that dangerous.” Again, humanity is the primary risk in Thiel’s theology.

Thiel considers that the world is beset with existential crises. He lists climate change, the threat of nuclear war, the singularity, pandemics and other aspects of the so-called polycrisis. Humanity fears the “apocalyptic specter” but, he contends, it views the solution to be “a one world state that has real teeth, real power. And the biblical term for that is the Antichrist.” Thiel deems centralised global government synonymously as “the Antichrist or Armageddon.” As salvation will only be found when people recognise the truth about the founding murder of Christ, society must confront and be realistic about its own mimetic violence. The problem is, Thiel argues, that humanity is not “apocalyptic enough.”

Continuing his conversation with Robinson, Thiel used the allegory of Odysseus‘ return voyage to Circe’s island, observing how Odysseus carefully navigated the waters between the dangers of the six-headed monster Scylla (the polycrisis – apocalypse) and the whirlpool Charybdis (a one world state – Armageddon or the Antichrist). Comparing himself to Odysseus, Thiel says that he would like to chart “some narrow path between these two where we can avoid both.”

From Thiel’s theological perspective, the mimetic apocalypse is driving the polycrisis and humanity is reacting to it buy embracing the Antichrist—one world government (Armageddon). He posited that humanity is “groomed to the Antichrist solution.” Thiel said he is “not a Calvinist,” that these outcomes were not predetermined and he could envisage a “third way.”

Accepting mimetic apocalypse and the Antichrist Armageddon as the only “two options” is the mistake of the “political atheist,” according to Thiel. Apparently, the third way lies somewhere between. If you take a more Christian view, as the “US is ground zero of globalization” its is also “ground zero of the resistance to bad globalization.” Globalization isn’t unchristian but the wrong kind of globalisation—bad globalisation—is seemingly so.

Speaking as a “Christian” at an event last year organised by the ACTS 17 Collective—a backronym whose full name is Acknowledging Christ in Technology and Society—and held at the home of Garry Tan, Thiel claimed that humanity is “caught up in all these crazy dynamics” and that “[t]here are these bad cycles of imitation, status games that you get wrapped up in.” When considering how his fellow Christians should respond to the inevitable mimetic crisis and future apocalypse, Thiel advised:

[Of] the Ten Commandments, the two most important are the first and last on the list. The first commandment is, you should worship God. The tenth commandment is, you should not covet the things that belong to your neighbor.

According to Thiel, the Christian thing to do, first and foremost, is to avoid mimetic failings and worship God. It seems the other eight Commandments—which extol traditional Christian values of not taking God’s name in vain, not killing, stealing, committing adultery, or bearing false witness, and so on—are less crucial to him. One wonders what the point of worshipping God is if God’s essential message to humanity is of secondary importance to this self-proclaimed Christian.

That said, moral leeway certainly accommodates “Christians” who want to ensure they maintain the “correct mixture of violence and peace.” As we shall see in Part 2, this would seem particularly important for Thiel’s “Christianity,” given his extensive links to the US military-intelligence-industrial complex and his genocidal war profiteering. (It isn’t quite clear how these pursuits fit with any recognisable Christian values.)

ACTS 17 bills itself as a Christian non-profit organisation that is “redefining success for those that define culture.” It seems that “success” and the ability to “define culture” are now Christian values.

This non-profit runs church seminars and workshops instead of food banks or community projects. It reaches out to America’s tech-savvy, TechnoKing wannabes rather than embracing the disenfranchised poor. It was formed by three servants of God: Y Combinator’s Garry Tan, Founders Fund partner (and Anduril co-founder) Trae Stephens, and Trae’s wife Michelle.

ACTS 17’s exploration of Christian values is unusual. It appears to be offering Christianity as an alternative to believing in “whatever.” Michelle Stephens, a PhD and RN who co-founded Oath Care and is its chief nursing officer, explained the philosophy this way to San Francisco Standard reporters:

As humans, we are all made to worship and will worship something if we don’t worship God. [. . .] What are you putting your faith in? What are you worshipping?

Oh well, why not give the Christian God a go then? It’s not as if you have to commit to anything else, other than avoiding mimesis, if you can.

For his part, defense contractor and venture capitalist Trae Stephens is at ease with developing AI weaponry and simultaneously being a “Christian.” In a September 2024 interview with the technology magazine Wired, Stephens declared his belief that “Jesus doesn’t care about classes of people. He cares about people.” He then added:

There’s a lot that venture capitalists do that is directly aligned with abundance—caring about improving humanity. [. . .] [T]he essence of venture capital is creating wealth. It’s not extractive. It’s not zero-sum. It’s the idea that you can make something from nothing, and that is, foundationally, a theological idea.[. . .] The call that I have been trying to make to the tech community is that we have a moral obligation to do things to benefit humanity, to draw us closer to God’s plan for his people.

Accelerationist venture capitalism is thus made a Christian act of mercy. The social consequences of one’s investment strategy are largely immaterial. Generating something—great wealth and the power to kill—from nothing is our moral obligation and the essence of Christianity.

Trae is instrumental in moving warfare into the private sector. Under his guidance—and Thiel’s influence—Anduril’s “Lattice for Mission Autonomy” system uses Anduril’s bespoke Lattice AI software to enable a single human operator to supposedly control hundreds of autonomous weapons systems. This includes Anduril’s AI-run Barracuda cruise missiles.

I am in no position to question anyone’s faith, and I am not doing so here. But it is reasonable for any of us to challenge obvious hypocrisy. When used as an adjective, the word “Christian” means “good, kind, helpful” conduct. These qualities reflect real Christian values and are the least we can expect from someone who describes themselves as “a Christian.”

It is indefensible to profess oneself a Christian while acting in a way that no rational person could ever perceive as Christian. Calling oneself a follower of Christ while founding companies whose mission is normally perceived as unchristian—indeed, is antithetical to the common understanding of what it means to be Christian’. It sounds like moral grandstanding and it is legitimate, if not requisite, to question such duplicity.

This is not to suggest that all the characters in this article do not believe in God or genuinely consider themselves Christian. They well may. But if Thiel and Stephens do, their concept of Christianity is one that the vast majority of us cannot relate to.

Dark Enlightenment Christianity, then, appears to be an intellectual reimagining that is based more upon sociopolitical philosophy than on any cogent theology. Sure, if you claim that Christianity demands a supposedly realistic appraisal of the mimetic violence of human culture; if you believe a more practical approach to conflict is warranted; if you contend that your ultimate objective is to mitigate the human cost of the impending apocalypse and avoid the Armageddon of the Antichrist, then calling your company’s targetted drone strikes “Christian” is not off base. But to the rest of us, such self-justifying talk sounds more like self-deception than an unselfed Christian walk.

As to what the other recent converts to the Thielverse truly believe, who can say. But, if it is anything like Thiel’s version of Christianity, there is no reason to welcome it.

From Ideology to Policy

Political ideology only becomes influential once it shapes government policies and political agendas and, in turn, once those policies and agendas impact society. By way of example, let’s consider stakeholder capitalism.

The United Nations (UN) redefined the role of governments during the 1990s. Its then-Secretary-General Kofi Annan, addressing the World Economic Forum (WEF) in 1998, spoke of a “quiet revolution” at the intergovernmental level:

The United Nations once dealt only with governments. By now we know that peace and prosperity cannot be achieved without partnerships involving governments, international organizations, the business community and civil society.

Annan described the shift to a global public-private partnership (G3P) model of global governance. This “multistakeholder governance” resets and diminishes the role of governments. As mere partners of the private sector and of civil society organisations (CSOs), governments are tasked with creating what is called an “enabling environment“:

An economy’s enabling environment encompasses both formal and informal institutions; utilities and infrastructure such as transport, energy, water and telecommunications; as well as the framework conditions set by monetary and fiscal policy, and more broadly, public finances. [. . .] [T]he quality of a country’s enabling environment will not only have to be assessed on its ability to support growth and productivity, but also on the ability to transform the economy to achieve environmental and shared prosperity targets.

A properly designed and centrally planned enabling environment ensures that multistakeholder partnerships—of which governments are partner members—can set policy and regulations to achieve their shared “targets,” whatever they may be. For example, the UK government has created the necessary enabling environment in order for public-private partnerships to achieve Net Zero prosperity targets. Its policy and regulatory measures include:

• New business models, standards and market arrangements to facilitate uptake of solutions, for example energy as a service and time-of-use tariffs.
• [F]inance options to support new products and services.
• Economic models for new or significantly scaled-up commodities.

It is a mistake to assume enabling environments are components of the kind of centrally planned command economy we might normally associate with communism. Multistakeholder partnerships and enabling environments have emerged not from collectivism but from stakeholder capitalism. First outlined by the current chairman of the WEF’s Board of Trustees Klaus Schwab in the 1970s, stakeholder capitalism has progressed by exploiting the communitarianism proposed by Amitai Etzioni and others. Although the communitarian philosophy is an outgrowth of the ideas espoused by the Utopian socialists, there is nothing socialist about stakeholder capitalism.

A full-blown stakeholder capitalist society would replace representative democracy with a network of so-called citizen assemblies. The propaganda pitch for these assemblies alleges they are designed to improve citizen engagement in policy making. Representative members of the public, private, and “civil society” sectors assemble to deliberate policy with the purported aim of decentralising political power.

But if we look more closely at the stakeholder capitalist assembly model, we see that the public-private partnership retains all the authority and controls the distribution of all resources. What’s more, the public-private partnership sets the agenda for debate. The “civil society” component, largely represented by what investigative journalist Cory Morningstar calls the non-profit industrial complex, is dominated by non-governmental organisations (NGOs), which are beholden to the “philanthropy” of oligarchs like Jeff Bezos.

We’ve already said that stakeholder capitalism suggests a triumvirate power-sharing structure leading to multistakeholder policy-setting. And we’ve said that, in truth, the public-private partnership two-thirds of the triumvirate dominates the civil society one-third. “Citizen assemblies” are merely PR stunts meant to lend the public-private partnership faux democratic legitimacy.

Representative democracy does not afford the people much democratic oversight. If stakeholder capitalism, including its citizen assemblies, were fully implemented, as Klaus Schwab proposes, democratic oversight would be removed completely. Stakeholder capitalism is designed to liberate public-private partnerships—not the people.

Multistakeholder public-private partnerships are ubiquitous. China’s model of stakeholder capitalism, for instance, has fully integrated public-private partnerships within the mechanism of the state. While large, state-run policy research units remain dominant in China, privately funded policy think tanks, such as the National Strategy Institute and the Chongyang Institute for Financial Studies, have been afforded increasing influence.

In the West, the historical relationship between private capital and the state is different from that of, say, China. The US and UK governments, for example, have long favoured policy development suggestions from private think tanks.

Nonetheless, wherever we look, stakeholder capitalism has taken root. Gov-corp represents the complete privatization of the state, and Technocracy offers a blueprint for how the fully privatised state can manage the public “social mechanism.”

The notion of a fully privatised state, that is, a “private” yet “public” state, is a somewhat odd concept for most people to wrap their heads around. Probably the nearest example of a similar governance structure would be Benito Mussolini’s fascist Italy. In the 1935 publication Fascism: Doctrine and Institutions, Mussolini wrote:

The corporate State considers that private enterprise in the sphere of production is the most effective and useful [sic] instrument in the interest of the nation. In view of the fact that private organisation of production is a function of national concern, the organiser of the enterprise is responsible to the State for the direction given to production. [. . .] State intervention in economic production arises only when private initiative is lacking or insufficient, or when the political interests of the State are involved.

That said, stakeholder capitalism is not fascism. It is an inversion of the fascist relationship between the public and private sectors.

The fascist doctrine sets the private sector free to innovate but constrains its authority within the orbit of the political state and its institutions. Stakeholder capitalism ultimately enables private corporations to use the political authority of the state for their own ends through partnership agreements. Stakeholder capitalist ideology has taken hold of government policy everywhere and is a logical step along the road to a gov-corp Technocracy.

Oligarch Upheaval

Highly plausible rumour has it that several Silicon Valley companies run by self-styled “TechnoKings”—among them Thiel at Palantir, the directors of OpenAI, and SpaceX founder Musk (the original “TechnoKing of Tesla”)—are forming a consortium and leading the charge to seize control of the US military-industrial complex. For his part, Musk’s defence and intelligence contracts are the centrepiece of his sprawling commercial empire. His provision of Starlink satellite terminals to Ukraine during the war with Russia is well-known.

Starlink, a SpaceX division, was used by the Ukrainian military for offensive purposes. It would be ridiculous for Starlink representatives to pretend they didn’t know their satellite service would be used to launch attacks, and yet deny it they did. SpaceX President Gwynne Shotwell, for instance, said Starlink was “never intended for offensive purposes.” Ukrainian officials said they found Shotwell’s comments “strange,” since Starlink’s intended military use was glaringly obvious.

It should come as little surprise that practically the first “inefficiency” concern raised with the DOGE came from a defence contractor. CEO Chris Kubasik of L3Harris Technologies, a company that specialises in intelligence, surveillance, and reconnaissance (ISR) as well as signals intelligence systems, told the DOGE that the US defence acquisition system—procurement process—was too slow and bureaucratic to keep pace with the threats posed by Iran and China.

It is clear who will be the beneficiaries of the DOGE drive to make the US military-industrial complex more efficient. In an interview with CNBC, Joe Lonsdale, co-founder of Palantir and a Thiel protégé who invests heavily in Anduril, said:

I have a lot of friends involved in DOGE. [. . .] If you are forced to use your money more efficiently [. . .] that’s when Palantir and Anduril will win. [. . .] Pete Hegseth, our Secretary of Defense, was very clear that he wants to have competition, he wants the best ideas to win. [. . .] And that means companies like Anduril and like Palantir are going to keep growing really fast.

Secretary of Defense Pete Hegseth’s public Venmo profile exposes his close relationship with the Thiel/Musk-linked faction bidding to seize control of Department of Defense (DOD) procurement. It seems Lonsdale’s observation that Hegseth is “our Secretary of Defense” is far more specific than most American voters realise.

We are evidently witnessing a power shift within the globalist oligarchy. The new breed of technocrat neoreactionaries are favoured in the US. Sadly, while American voters have been duped into thinking this offers them an escape from what they perceived as the suffocating “woke” censorship regime of the Biden administration, they are actually being accelerated toward something worse.

Oligarch upheaval never improves our lives, it merely indicates which oligarch faction has primacy. The DOGE attack on USAID—which was extensively infiltrated by US intelligence agencies—is symbolic. While Musk has castigated USAID’s waste and inefficiency, he has failed to mention that USAID previously funnelled funds to finance Starlink’s ventures in Ukraine. Are we supposed to believe Musk would destroy one of his own income streams?

If and when the Thiel/Musk-fronted oligarch network seizes control of DOD budgets, they won’t need the USAID back door. As will be evidenced in Part 2, the new public-private intelligence partnership formed by Palentir, Anduril, ClearviewAI, and others means that the potential for US intelligence agency projects to go even darker has increased, not decreased, with the purported demise of USAID.

Meanwhile, hapless US voters, not to mention numerous MAM pundits around the world, are cheering the end of USAID. While, in many respects, some enthusiasm is understandable, it is hopelessly misplaced. A privatised, darker deep state is certainly not going to benefit humanity, only the oligarchs.

As the DOGE sets about using AI to evaluate the efficiency of the human beings that work in government departments, it is not without justification that some have recognised the “post-human” nature of this new form of technological governance. The technocrats and the accelerationist neoreactionaries are remaking the US state in their own image absent any notable oversight. They are using creative destruction to deterritorialize the extant Cathedral and reterritorializing the US state with an even more rigid and authoritarian Cathedral of their own.

In Part 2, we will look at more examples that reveal how members of the so-called superclass that backs Peter Thiel and Elon Musk are exploiting their relationships with the US state to roll out a government policy agenda aligned with their political ideology. In doing so, they are knowingly laying the groundwork for a US gov-corp Technate fit for a multipolar world order.

The Dark MAGA Gov-Corp Technate — Part 1.

Key Takeaways

• A monetary network’s success is dependent on the size and volume of its active user base.
• The former lead of Facebook’s Libra project, David Marcus, is the former President of PayPal. PayPal’s founding mission, and subsequent T-shirt motto, was to create “A New World Currency.”
• Marcus built Facebook’s stablecoin project after concluding that Bitcoin lacked the qualities to be a successful medium of exchange.
• In order to appear decentralized, Libra formed the Libra Association, but included many very inter-connected businesses and people, as noted elsewhere in The Chain series.
• Government regulators, fearing Facebook’s immense active user base, quickly called the Libra team to testify before Congress, and eventually pressed the project to fold before launching.
• Libra had previously stated in their S-1 filings that regulatory pressure and uncertainty could lead the project to never launch. Other evidence suggests the entire goal of Libra was to perfect the public-private partnership for the future implementation of the U.S. government’s preferred digital currency project.
• Jared Kushner sent an email to Steve Mnuchin in May 2019 regarding a Sam Altman post on stablecoins titled “US Digital Currency.”
• Mnuchin’s Treasury then held a March 2020 meeting after inviting many figures mentioned in The Chain series, including Wences Casares and Peter Thiel.
• Libra announced partnerships with Fireblocks, Silvergate Bank, and Paxos in order to expedite their stablecoin project, but none materialized.
• After being shutdown by regulators, Libra sold off its assets to Silvergate Bank in January 2022.
• Silvergate facilitated Bitcoin-collateralized loans with MicroStrategy and Marathon Digital, and were partially owned by Block.One, BlackRock, State Street and Citadel Securites.
• Silvergate Bank, whose SEN product serviced a substantial amount of firms mentioned in The Chain series, was then liquidated by regulators in March 2023.
• Silicon Valley Bank (SVB), which failed two days after Silvergate, banked a significant amount of the companies and venture capital in the cryptocurrency industry.
• The day before the SVB collapse, Peter Thiel’s Founders Fund pulled out funds, and advised clients to do the same, triggering deposit flight.
• 10 customers alone had $13 billion in deposits at SVB, and $42 billion left the bank in 6 hours. In other words, SVB collapsed due to an acute liquidity crisis that was spawned by very few people.
• The Trump administration’s deregulation of the banking industry in 2018 loosened capital and reporting requirements, leading to many of the issues seen in the banking crisis in 2023.
• Circle’s USDC stablecoin, which had $3.3 billion of reserves at SVB, would “depeg” to 86 cents during the crisis.
• Six months after the banking crisis, and two weeks after the U.S. House Financial Services committee advanced their first stablecoin bill, Paxos and PayPal launched PYUSD.
• The Gillibrand-Lummis Stablecoin Bill was directly influenced by the Terra-LUNA collapse, which resembles more of a controlled demolition than an organic collapse. As a result, the bill bans algorithmic alternatives in pursuit of preserving the dual banking system. Both Senator Gillibrand and Senator Lummis have significant donor ties to many of the firms mentioned in The Chain series.
• Large lobbying groups, such as Coin Center and the Digital Chamber of Commerce, were formed to help guide legislation as it relates to stablecoins and digital assets. Both of these lobbying groups have advisory ties to stablecoin issuers and many firms and people mentioned thus far in The Chain series.
• Multiple parties mentioned in this piece, from the Libra team to lobbyists, have echoed the sentiment that USD stablecoins can help retain the U.S. dollar as the world’s reserve currency.
• Many of the companies formed after the dissolving of Libra carry on the work of building a new financial system based on stablecoins and public blockchains.
• According to national security state members, Bitcoin and stablecoins can provide a “boon for surveillance” in addition to helping grow the economy.
• The Bitcoin-Dollar system, as described in The Chain series, is the actualization of PayPal’s founding intention to create a “new world currency”, and it was carefully constructed to appear as an organic phenomenon when it is not.

The initial trio of pieces in The Chain series have focused on the three essential pillars for creating a new digital monetary system. The first, The Chain of Custody, examined the construction of novel custodial infrastructure to enable the secure holding of billions of dollars worth of digital assets after the proliferation of Bitcoin as a new financial class. The second, The Chain of Issuance, investigated the primordial roots of digital payments fortifying data brokers and information bankers within the global surveillance network. It also noted how stablecoin issuers are the modern day analogue to the influence that the major infrastructural titans of the Industrial Age had on the formation of The Federal Reserve in the first half of the 20^th century. The third, The Chain of Consensus, focused on the currency speculators and intelligence-connected developers behind the monetary policy and consensus infrastructure of privately-issued money and the blockchain revolution during the infancy of the Deflationary Age brought about by Bitcoin and the subsequent, dollarized iterations of its underlying database technology.

In summary, a new financial system cannot be built without the ability to custody assets, issue new assets, and uphold the settlement and monetary policy of said assets via a governing consensus. Yet, even with the successful formation of this necessary trifecta, the construction of a monetary network is simply fruitless without the acquisition of the last remaining pillar: a network of active users. This concept is well understood by both the private sector companies that have been mentioned throughout this series, in addition to the public sector that currently acts as the enabling environment for the rules and regulations of nation-state monetary systems upheld by central banks across the world. None of these public issuers of money, however, have the global impact of the U.S. Federal Reserve and the U.S. Treasury system, which provides immense privileges that come downstream from their issuance of the notes and reserves backing the world reserve currency, the U.S. dollar. With 66 countries worldwide listing the dollar as an official currency, the vast number of users utilizing these instruments makes the dollar system the largest financial network in the world.

Even within this monopoly, there is a fractured set of settlement networks, such as PayPal, and private banks, such as J.P. Morgan, issuing said dollars in users’ checking accounts. This balkanization presents a unique opportunity for further consolidation and, with that consolidation, the ability to acquire even more users. For example, PayPal acquired millions of global users via their purchases of Venmo and Xoom, while J.P. Morgan assumed the deposits of the failed First Republic Bank after the onset of the regional banking crisis in 2023.

Money itself is but a technology that enables agreeable and predictable outcomes between two bartering parties. This axiom requires money that simultaneously acts as a unit of account, a store of value, and a medium of exchange. While all of these properties can be met by a multitude of currently circulating currencies – and even commodities – their usefulness for settlement across both time and space is determined nearly entirely by the number of users within their respective networks. The dollar system is the most liquid monetary network in the world, and has held this position for nearly a century. Historically, the world’s reserve currency has held its dominant status for roughly this same duration of time. With U.S. debt levels now growing at uncontrollable and exponential rates, the formation of proposed alternatives to the dollar’s monopoly are popping up across the globe. The world economy is a finite pie consisting of finite users, and with the dollar network appearing truly weak for the first time in decades, competitors are posturing for a piece. However, with the global broadband internet dissolving some of the control that nation states have over their own citizens’ monetary choices, the world is actually dollarizing faster than ever.

As the internet age enters its third decade, the stakes for creating the internet of money have never been higher. For now, the proliferation of dollarized blockchains seemingly aims to fortify the dollar’s hold over global finance, not dissolve it. Regardless of the dollar’s domination of denomination, the upstart issuers of these tokenized assets have hemorrhaged away enough users that it now threatens many of the privileges the legacy system once enjoyed, mainly the available profits found by selling their data and leveraging their deposits.

The understanding that social networks are communication platforms, and that money itself is just a ledger upholding the communicative expression between users, led the social media giant Facebook to experiment with adding financial instruments to their vastly popular Messenger app. While Bitcoin and alternatives had been around for nearly a decade before Facebook’s Libra was proposed, this was “the shot heard ’round the world” for central bankers and regulators to sit up straight and take a novel payments system proposed by the world’s largest social network seriously.

Yet, as Facebook soon found out, if you come at the king, you best not miss. Or at least this was the story that was told to the world: The U.S. regulatory system said “No” and that was that. However, this concluding piece to The Chain series, The Chain of Command, postulates that Libra was never intended to actually go to market as designed, but rather was meant to set the stage for clear regulation via legislation that would become the enabling environment for a decades-long attempt at creating a new world currency by the very same parties covered thus far in this series.

Libra, Diem and Facebook’s Stablecoin

Sitting on a Caribbean beach during the winter of 2017, David Marcus was struck with the idea of creating a global digital currency to run on Facebook’s Messenger. Marcus, who had sold his mobile payment provider Zong to PayPal for $240 million in 2011, and who had been introduced to Bitcoin in 2009, was certainly no spring chicken to the rapidly evolving FinTech and digital payments space. Within nine month of Zong’s acquisition by PayPal, Marcus was named PayPal’s president in April 2012. Then, in June 2014, Marcus was recruited by Facebook’s Mark Zuckerberg to run their Messenger app. By the time the idea that would become Libra began to germinate during his 2017 vacation in the Dominican Republic, the social network’s messenger app boasted over 1.3 billion active users.

Prior to his experience with PayPal and Facebook, Marcus had founded GTN Telecom, noted as being the “first to break Switzerland’s telecommunications monopoly” in 1996. GTN Telecom was backed by the UK’s 3i, a venture capital firm founded in 1945 by the Bank of England and “a syndicate of British banks,” and was later sold in 2000 to WorldCom’s World Access just two years before WorldCom would file for Chapter 11 bankruptcy after excessive accounting fraud. Marcus went on to found Echovox, a “mobile monetization company focused on monetizing web and traditional media audiences” via “transaction-enabled mobile services,” shortly after the October 2000 sale of GTN. Zong was later spun off from Echovox. Bertrand Perez and Kurt Hemecker, two executives at Zong, would become part of the founding team at Libra alongside Marcus.

“In late 2009 when I first stumbled upon Bitcoin and read the white paper, I tried to play with it, but it was so cumbersome even for a geek like me. I just couldn’t get it. So I kind of put it aside, brushed it aside, and then came back to it in 2012 when a good friend of mine who’s often referred to as a Patient Zero in Silicon Valley for Bitcoin, [Xapo’s] Wences Casares, basically started telling me more about it and telling me ‘you have to actually spend time and understand this thing.’ And so I did. And then I just couldn’t stop thinking about it. I just couldn’t stop thinking about this idea that you could actually be your own self-sovereign for digital value and you could move it around without any intermediary in between…

Then in 2013 at PayPal, that’s after Zong got acquired by PayPal and I was running it, I remember that Argentina asked us to actually stop the flow of money going out of the country from PayPal accounts located in Argentina. And I remember us having to comply because we were regulated entity, and seeing the price of Bitcoin rise the same day. And it was really clear that a lot of Argentines at the time were actually moving their funds into Bitcoin so that they would have control over their hard-earned money.”

David Marcus, The Block, June 27, 2023

According to reporting from Financial Times, Marcus, a close confidant of Zuckerberg, apparently “texted Zuckerberg to outline his ruminations” and after successfully convincing Facebook’s CEO, he was given a “blessing to explore the idea further.” Marcus quickly outlined his idea in an internal memo, highlighting that “Facebook’s more than two-billion-strong user base” empowered with crypto “could offer a convenient and cheap way to move money around the world,” in addition to providing “a treasure trove of data about what people spend their money on.”

For the social network, the “possible multi-billion-dollar commercial opportunities were clear,” including “user transaction data,” “more engagement,” “more e-commerce,” and “a slice of fees from transactions.” According to an unnamed regulatory official, this “was always their advantage.” Libra would “create tremendous opportunity and a lot of money for them. But if Facebook was going to be the reason it was very successful, they were also going to be the reason it would fail.”

During the months right after Libra’s announcement, Marcus updated his thoughts on Bitcoin, stating “For me, now, it’s clearer that Bitcoin serves a purpose of being digital gold, not a good medium of exchange.” It was this axiom that led Marcus to express that “this was the right time for us to start thinking about how we could address the very things that blockchain and cryptocurrency were meant to do” and that “we had real solutions to bring to the fore.” Marcus later explained his motivations for bringing publicly-issued money via tokenized dollars to the Libra experiment in an August 2023 conversation with Bankless:

“I don’t think that I’m in the camp of people who want to fully separate money from State. I feel like my own personal objective is to actually make the underlying rails really efficient, really open, really interoperable, and enable more people to have access to them. I think that the world where actually good governments cannot control their own monetary policy, etc., this world where it doesn’t exist, would be chaos.”

It is perhaps this affinity for State-controlled monetary policy that led Marcus to announce Libra to the world within the confines of The Old San Francisco Mint in June 2019. However, the project itself was started both in earnest and in secrecy by Facebook in early 2018, when Morgan Beller, a former partner of Andreessen Horowitz, joined Marcus in plotting to bring both payments and a novel currency construction to Facebook’s Messenger product. According to reporting from the Financial Times, the pair first worked “in a small, empty room” with “walls adorned with whiteboards” within “Facebook’s main campus in Menlo Park.” Shortly after, the duo “moved to a larger, more secluded building” positioned “on the outskirts of the company’s headquarters” that limited access to “only employees with particular passes” consisting of “the crypto experts, engineers and economists.” The project was codenamed Libra, and Beller was quoted as saying that the team was “paranoid about leaks” and operated “like a secret Swat operation.”

In addition to Beller, Marcus was quickly joined by Christian Catalini, a research scientist at MIT who had founded the MIT Cryptoeconomics Lab. While there, Catalini designed the MIT Digital Currency Research Study, which “gave access to Bitcoin to all MIT undergraduate students.” In 2013, Catalini became a member of the Technology Advisory Committee of The Commodity Futures Trading Commission (CFTC) alongside his advisory board appointments to Coinbase, Algorand, Chainlink and Hivemind Capital. Catalini became essential to the development of Libra, and is noted as being a co-creator of Libra and Chief Economist of the Diem Association after Libra rebranded to Diem, in addition to his title of Head Economist at Meta FinTech.

Catalini, alongside Jai Massari – a partner in the Financial Institutions Group of Davis Polk & Wardwell LLP and an outside counsel to Diem – wrote a piece titled “Stablecoins and the Future of Money” which proposes that “through a sensible regulatory approach, true stablecoins can fulfill their promise without introducing new risks.” Their theory on the next evolution of money, which was demonstrated throughout the multitude of iterations of Libra, is excerpted below:

“Modern money is a combination of public and private money. Public money includes central banks-issued cash and digital claims against central banks. Private money includes deposit claims against commercial banks. While the public sector protects the stability of money, up to 95% of money in developed economies is private. Stablecoins are a form of private money. This is not a new concept — the idea of separating monetary and credit functions traces back 80 years. By lowering the cost of digital verification, blockchain technology can expand the role of both the public and private sector in the provision of money. While the public sector could attempt to connect with consumers and businesses directly, the private sector is likely to be more efficient in meeting the public’s needs and increasing choice.

Succeeding in this transformation will require the right balance between the public and private sectors. Countries that overemphasize the public approach will likely end up falling short in speed to market, competition, and innovation…The public sector may also struggle with serving citizens and businesses effectively. Given the incredibly high bar in terms of resilience and security, it will likely take years for a CBDC to be developed and adopted…This is where CBDCs and stablecoins are strong complements, not substitutes. The public sector could focus on issuing digital coins and delivering on sound money, while the private sector could build rails and applications. Competition with legacy networks would further ensure a higher degree of resilience and innovation…

The question for central banks and regulators then becomes which combination of the three approaches [“true” stablecoins, deposit coins, and CBDCs] can also improve competition, lower cost, and increase access to the financial system…A much stronger combination would be the public sector focusing on regulation of stablecoins first, and then on CBDC issuance on multiple rails later to complement potential shortcomings…Public sector guidance and standard setting can be incredibly useful in promoting the right solutions in these areas…In the case of money, the public and private sectors can play to their relative strengths, solidify their public-private partnership, and improve societal outcomes in the process.”

Catalini, Massari, and Marcus would all go on to form LightSpark – an institutional payments company focused on Bitcoin and the Lightning Network – after the dissolution of the Libra project. The pivot back towards Bitcoin and specifically the Lightning Network is perhaps best exemplified by the regulatory realities within the United States. As Marcus stated to The Block: “I just want to state that I feel like it’s a shame that we’re in this current state of uncertainty from a regulatory standpoint as a country… I think you know the reason Bitcoin is so special is because, first of all, it is the only asset out there that has been clearly defined as not a security by the SEC in the U.S.” In fact, the Libra team actually met with Lightning Labs at the onset of the project while still in the process of determining the best course of action to build Facebook’s digital currency. According to Marcus during a discussion with Bankless, “In early 2018,” the Libra team “went to see Lightning Labs team in SF and we looked at Lightning as one of the ways to actually do this.” In this interview, he further articulated his position on Lightning, bringing stablecoins to Bitcoin, and even algorithmic stablecoins:

“I’m actually all for stablecoins on top of Lightning when that becomes a thing and there are a number of work streams that are out there to make that happen. I think my problem is actually if you’re dependent on one stablecoin, or one asset, to be the native core settlement asset of a payment network, then you have a problem because the algorithmic stablecoins don’t work in my opinion. I really believe that it’ll never work and so stablecoins need to have a reserve and someone controls that reserve and if someone controls that reserve, then it’s the single point of failure of your entire payment network if you’re solely dependent on it.”

Despite the team’s interest in Bitcoin, Marcus stated that “unfortunately the tech just wasn’t ready for prime time and certainly not for scaling to the type of scale that Meta had with its Messaging apps.” This realization led Marcus and his team to “actually go build new tech and that’s what we did.”

After the Libra project was announced to the world in 2019, there were a few organizational strategies employed in order to mitigate the appearance of centralization, including the establishment of the Libra Council, the Libra Association, and the board of directors. All three of these groupings were formed during the inaugural meeting held in October 2019 in Geneva, Switzerland. The first batch of organizations that signed on as members included: “Anchorage, Andreessen Horowitz, Bison Trails Co., Breakthrough Initiatives, L.P., Novi Financial [initially known as Calibra, the company responsible for building the wallet software for Libra], Coinbase, Inc., Creative Destruction Lab, Farfetch UK Limited, Iliad, Kiva Microfunds, Lyft, Inc., Mercy Corps, PayU, Ribbit Capital, Spotify AB, Thrive Capital, Uber Technologies, Inc., Union Square Ventures, Vodafone, Women’s World Banking, [and] Xapo Holdings Limited.”

Many of the companies listed here have appeared within The Chain series, including the only OCC-chartered crypto bank Anchorage Digital, Marc Andreessen’s Andreeseen Horowitz, Coinbase, the PayPal- and Omidyar -affiliated Kiva, Meyer Malka’s Ribbit Capital, Fred Wilson’s Union Square Ventures, and Wences Casares’ Xapo. Others that have not been previously discussed in this series also boast ties to this same network. For instance, Thrive Capital, the venture capital firm of Joshua Kushner (Jared Kushner’s brother), raised $40 million in 2011 from investors including Peter Thiel, the Wellcome Trust, and Princeton University, while it later took an estimated $120 million from Goldman Sachs in 2021 via their Petershill Partners affiliate. The firm is advised by Twitter founder Jack Dorsey and holds a “good percentage” of the online payment juggernaut, Stripe, which in 2023 raised nearly $6.5 billion from Andreessen Horowitz, Thiel’s Founders Fund and Goldman Sachs. In October 2024, Stripe would spend $1.1 billion to acquire stablecoin issuer Bridge, leading Stripe CEO Patrick Collison to refer to stablecoins as “room-temperature superconductors for financial services.”

Another example is Breakthrough Initiatives, which was formed by DST Global founder and Xapo investor Yuri Milner. Milner is perhaps best known for creating The Breakthrough Prize with Mark Zuckerberg and Anne Wojcicki, the ex-wife of Google’s Sergey Brin and current CEO of 23andMe. The Creative Destruction Lab is a non-profit that has partnered with XPRIZE, a foundation started by Singularity University’s Peter Diamandis with a board featuring Google’s Larry Page, Elon Musk, film director James Cameron, and Google’s Ray Kurzweil, who sponsored the Singularity Summit in 2006 alongside Thiel and the Machine Intelligence Research Institute, the latter was advised by Thiel and blockchain pioneer Jed McCaleb. McCaleb is best known for founding the first significant Bitcoin exchange, Mt.Gox, in addition to Ripple Labs and Stellar, the latter of which raised funds from “Stripe and PayPal executives” and features the PayPal Mafia’s Keith Rabois, Thiel-protégé Sam Altman, Stripe CEO Patrick Collison, and the Idealab– and Thiel–affiliated Naval Ravikant as advisors.

In addition to the Libra Association, a technical steering committee was formed in December 2019. Five members were elected including Anchorage Digital co-founder Diogo Mónica, Calibra core product lead George Cabrera III, Bison Trails founder Joe Lallouz, Union Square Ventures partner Nick Grossman, and Mercy Corps emerging technology director Ric Shreves. The Libra Council also appointed a board of directors, which included Matthew Davie of Kiva Microfunds; Patrick Ellis of PayU; Katie Haun of Andreessen Horowitz; David Marcus of Novi Financial; and Wences Casares of Xapo Holdings Limited. The Libra board, once established, voted on and appointed the initial Libra Association staff, including Bertrand Perez as Chief Operating Officer and Interim Managing Director; Dante Disparte as Head of Policy and Communications; and Kurt Hemecker as Head of Business Development. In addition to other Libra team members not mentioned in the early press releases, Laura Morgan Walsh, a 13-year veteran of PayPal, was named Head of Operations.

Katie Haun, in addition to her role at Andreessen Horowitz, is the Founder and CEO of Haun Ventures, alongside Libra steering committee member Diogo Mónica. Haun, a lifetime member of the Council of Foreign Relations (CFR), and a Coinbase board member from 2017 until 2024, began her career with a decade long stint as a federal prosecutor serving the SEC, the FBI and the Treasury, responsible for creating the U.S. government’s first cryptocurrency task force that helped lead investigations into the Mt.Gox hack and the Silk Road prosecution. Haun went to Stanford Law School, and studied with Sam Bankman-Fried’s parents, meeting the now infamous and disgraced head of FTX when he was only a child. Casares, featured in The Chain of Custody, is a long-time friend of Marcus, and joined the PayPal board in 2016, in addition to being on the board of Kiva and the executive chairman and founder of the cryptocurrency lobbying group, Coin Center.

In addition to the initial 21 companies that signed on to the Libra Association, payment stalwarts Visa, PayPal, Mastercard, Stripe and Mercado Pago all expressed interest in the project, before promptly dropping out, alongside PayPal-acquirer eBay, after pressure from U.S. regulators. Senator Brian Schatz (D-HI) and Senator Sherrod Brown (D-OH) sent letters to Visa CEO Alfred Kelly, Jr., Stripe CEO Patrick Collinson, and Mastercard CEO Ajaypal Banga “over the firms’ participation in the developing network.” “It is chilling to think what could happen if Facebook combines encrypted messaging with embedded anonymous global payments via Libra.” Schatz and Brown also suggested that participating firms “such as Visa, Stripe, and Mastercard” may see “heightened regulatory scrutiny overall” as a result of Libra Association membership when they wrote: “If you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities.”

This sentiment was first initiated by Maxine Waters, the Californian congresswoman who sat as the Chair of the House Financial Services Committee during the Libra hearings, in a letter dated July 2, 2019:

“We write to request that Facebook and its partners immediately agree to a moratorium on any movement forward on Libra—its proposed cryptocurrency and Calibra—its proposed digital wallet. It appears that these products may lend themselves to an entirely new global financial system that is based out of Switzerland and intended to rival U.S. monetary policy and the dollar. This raises serious privacy, trading, national security, and monetary policy concerns for not only Facebook’s over 2 billion users, but also for investors, consumers, and the broader global economy.

On June 18, 2019, Facebook announced its plans to develop a new cryptocurrency, called Libra, and a digital wallet to store this cryptocurrency, known as Calibra…While Facebook has published a “white paper” on these projects, the scant information provided about the intent, roles, potential use, and security of the Libra and Calibra exposes the massive scale of the risks and the lack of clear regulatory protections. If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past. Indeed, regulators around the globe have already expressed similar concerns, illustrating the need for robust oversight…

These risks are even more glaring in light of Facebook’s troubled past, where it did not always keep its users’ information safe. For example, Cambridge Analytica, a political consulting firm hired by the 2016 Trump campaign, had access to more than 50 million Facebook users’ private data which it used to influence voting behavior. As a result, Facebook expects to pay fines up to $5 billion to the Federal Trade Commission (FTC), and remains under a consent order from FTC for deceiving consumers and failing to keep consumer data private…

Because Facebook is already in the hands of a over quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action. During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail.”

Representative Waters furthered this apprehension in a letter penned the next month, August 2019, in which she stated that her “concerns remain with allowing a large tech company to create a privately controlled, alternative global currency.” David Gerard, the author of Libra Shrugged: How Facebook Tried to Take Over the Money, made note that “The attacks were absolutely bipartisan because both sides agree: you don’t mess with the money…This is what happens when the dreams of bitcoin bros meet reality.” In agreement with Gerard’s comment, both Waters and the Trump-nominated Federal Reserve Chair Jerome Powell expressed issues regarding Libra during Powell’s testimony before the House Committee on Financial Services in July 2019. Waters reiterated her concerns at the onset of the hearing, articulating that she “believe[s] that what Facebook is planning raises serious privacy, trading, national security and monetary policy concerns for consumers, investors, the US economy, and the global economy,” and further noted that “Facebook’s foray into this field should signal to all of us that our current system of regulation lacks adequate coordination safeguards and attention to crypto.” Waters even called upon Powell to “be a leader on this issue,” and that the Fed chair “should not take a wait-and-see approach when it comes to examining a financial system involving 2.4 billion people.” Powell seemed to be in agreement that Facebook’s large active user base presented problems for regulators not yet seen in other cryptocurrency experiments:

“Due to the to the possibility of quite broad adoption, Facebook has a couple billion plus users, so you have, I think, for the first time, the possibility of a very broad adoption. And if there were problems there associated with money laundering, terrorist financing – any of the things that we’re all focused on, including the company, they would immediately arise to systemically important levels just because of the mere size of the Facebook network.”

Jerome Powell, July 10, 2019, U.S. House of Representatives

Then-Treasury Secretary Steve Mnuchin, who initially recommended Powell to President Trump for the Fed Chair position, took a slightly more optimistic approach in commenting on Facebook’s currency plans, stating that “I’m fine if Facebook wants to create a digital currency, but they need to be fully compliant,” and “in no way can this be used for terrorist financing.” While on the topic of issuing digital currency, Mnuchin revealed that “Powell and I have discussed this – we both agree that in the near future, in the next five years, we see no need for the Fed to issue a digital currency.” In addition to discussions within the Trump administration, Powell had also confirmed that his team had “met with Facebook representatives in the months ahead of the Libra announcement,” in “part of the tech company’s global tour of meetings with financial authorities.”

According to reporting from Wired, many regulators “left those meetings unsatisfied,” and that “regulators in the UK, Japan, and Singapore have called for greater scrutiny of Libra in recent weeks.” At the time, the Bank of England expressed that “Facebook has made rounds with regulators around the world to discuss its plans [Libra], including us. There are benefits…but also risks we’re watching, and echo the statement [Bank of England] Governor Carney issued.” Then-BoE governor Mark Carney said he was “open-minded about Facebook’s Libra token,” but “warned mass adoption would force it” to “be subject to the highest standards of regulation.” Mu Changchun, the deputy director of the People’s Bank of China’s payment department told Bloomberg it “won’t be sustainable without the support and supervision of central banks.” France even set up a task force within the Group of Seven (G7) nations to discuss Libra, leading France’s finance minister Bruno Le Maire to state “It is out of question” that Libra be allowed to “become a sovereign currency,” and that “it can’t and it must not happen.”

In addition to these meetings by global financial regulators, President Trump himself held a dinner with Zuckerberg and Facebook board member Peter Thiel at the White House in October 2019 after the Facebook CEO testified to Congress regarding Libra. It was the second time Zuckerberg had met with Trump that Fall after a September 2019 meeting in the Oval Office. A few months before, Trump’s son-in-law and special adviser, Jared Kushner, had emailed Mnuchin in May 2019 regarding a blog post by Peter Thiel protégé Sam Altman titled “US Digital Currency,” in which Altman expressed a novel method for the country to attempt to adopt rather than attempt to stop cryptocurrency:

“I am pretty sure cryptocurrency is here to stay in some form (at least as a store of value, which is the only use case we have seen work at scale so far). There was possibly a time when governments could have totally stopped it, but it feels like that’s in the rearview mirror.

However, I think it’s very possible that the dominant cryptocurrency hasn’t been created yet (Google was years late to the search engine party, and Facebook came long after most people assumed the social network wars were won). And from the perspective of a nation, there are real problems with current systems, especially around pseudo-anonymity, ability to function as an actual currency, and taxability.

Although I don’t think the US government can stop cryptocurrency, I do think it could create the winner–let’s call it “USDC” for US Digital Currency–and fix some challenges that governments currently face with cryptocurrency. I think the first superpower government to do something like this will have an enviable position in the future of the world, and some power over a worldwide currency. The US government could decide to treat USDC as a second legal currency, which would be hugely powerful.”

Kushner asked Mnuchin his thoughts on a U.S. Digital Currency, and even suggested putting together a focus group to discuss: “Steven – Would you be open to me bringing a small group of people to have a brainstorm about this topic?” Kushner wrote. “My sense is it could make sense… and also be something that could ultimately change the way we pay out entitlements as well saving us a ton in waste fraud and also in transaction costs.” This email was revealed in “The Mnuchin Files,” which were obtained by CoinDesk via a FOIA request at the start of 2022. Within these files was the revelation that the Treasury had held a handful of meetings with regulators and private-sector payment companies involved in blockchain. One of these meetings was a March 2, 2020 “crypto summit” that featured prominent figures from The Chain series, including; Meyer Malka of Ribbit Capital, Joey Garcia of Isolas (in addition to positions at Xapo and RSK), Jack Dorsey of Twitter, Jerry Brito of Coin Center, Brian Armstrong of Coinbase, Peter Briger of Fortress (in addition to stints at Goldman Sachs, the Council of Foreign Relations, and PayPal’s Digital Advisory Board), Michael Gronager of the CIA-funded Chainalysis, Wences Casares of Xapo, and Jeffrey Yass of Susquehanna. Thiel was invited to this meeting, but was unable to attend. In addition to these private sector stalwarts, “high-ranking government officials from the Treasury, FinCEN, the FBI and other agencies” were also present.

Coinbase’s Chief Financial Officer, Alesia Haas “has a personal friendship with Secretary Mnuchin,” according to an email sent to the Treasury department. According to commentary from CoinDesk, Haas was previously CFO at OneWest, the bank Mnuchin ran during the 2008 financial crisis, that also employed former Coinbase executive Brian Brooks, who was made Acting Comptroller of the Currency in May 2020 via Mnuchin’s designation. While only at the OCC for a year, Brooks introduced “regulatory initiatives that provided banks with the green light to offer cryptocurrency custody services and stablecoin payment systems,” before leaving to re-join the private sector, including a three-month stint as CEO of Binance.US. The same month of Brooks appointment, May 2020, Haas was present during a Treasury conference call with Coinbase CEO Armstrong. Brooks allowed Anchorage Digital, a Libra Association member advised by PayPal co-founder Max Levchin, to secure a national trust charter and become the nation’s first and only approved “digital asset bank,” just days before he stepped down from his role in January 2021.

Republican Senator Mike Rounds of South Dakota penned a favorable letter to Anchorage in October 2019, becoming the first elected official to “endorse” the Libra project, stating: “Technologies like Libra … have the potential to help unbanked and underbanked consumers right here at home… It would be unfortunate to shun a new solution that could connect more of the most vulnerable Americans to our financial services system… Given the length of time it will take for the Fed to finish FedNow, the Libra Association should not wait to see if recent conversations about a Fed-run digital currency come to fruition.” While Senator Rounds endorsed Facebook’s project, few members of the regulatory arms of the U.S. seemed to share these sentiments.

Facebook, facing social and political prosecution for their involvement in what is now known as the Cambridge Analytica data scandal, was dealing with a crisis of confidence from their users and regulators as the Libra project began. Notably, Cambridge Analytica involved not just one but two companies closely connected to Peter Thiel: Facebook and CIA contractor Palantir. In addition, two prominent figures in the Cambridge Analytica data scandal, which was key to the successful campaign of President Trump, were Steve Bannon and Brittany Nicole Kaiser, with Bannon being referred to as Tether-cofounder Brock Pierce’s “right hand man,” and Kaiser having been the campaign manager for Pierce’s failed 2020 presidential campaign. Pierce would also “pop up” in campaign finance reports as a “Trump campaign megadonor,” who once spent $100,000 for “dinner and access” to Trump and Mnuchin. Zuckerberg himself acknowledged the impact of the scandal on Facebook’s crypto prospects when he told lawmakers in 2019, “I understand we’re not the ideal messenger right now . . . I’m sure people wish it was anyone but Facebook putting this idea forward.”

This self-acknowledged affliction on Facebook’s image led the company to make choice selections while building out the second iteration of Libra’s team. In May 2020, Facebook appointed Stuart Levey – the former Under Secretary for Terrorism and Financial Intelligence at the Treasury Department under President Bush and President Obama, senior staff at the Department of Justice, Chief Legal Officer of HSBC, and a senior fellow at the Council of Foreign Relations – as the CEO of Libra. After the shuttering of Libra/Diem, Levey joined CIA-front Oracle as an Executive Vice President and Chief Legal Officer. Libra would similarly hire Steve Bunnell – former Chief of the Criminal Division at the U.S. Attorney’s office, general counsel for the Department of Homeland Security, and Fellow of the Trilateral Commission – to become its Chief Legal Officer. “The people were really extraordinary, some of the very best,” stated Ari Redbord, who was the Senior Adviser to the Treasury Deputy Secretary and the Under-Secretary for Terrorism and Financial Intelligence. “They basically put together the team that regulators would want to hear from when they are looking [at] how you’re going to build out a compliance programme.”

In an attempt to sway regulators, Libra also brought on former HSBC executive James Emmet as a managing director; Sterling Daines as Libra’s Chief Compliance Officer who previously worked at Credit Suisse, Goldman Sachs, and Deloitte in addition to consulting for the DOJ and the Financial Crimes Enforcement Network (FinCEN); Saumya Bhavsar as General Counsel after experience at Credit Suisse, UBS, Euroclear, and the OCC, in addition to the European Commission and British Parliament; and former aide to the Chairman of the U.S. Senate Banking Committee Susan Zook from Mason Street Consulting to lobby on behalf of Libra.

In addition to Mason Street, Libra spent over $7.5 million in 2019 alone on third-party lobbying firms including Sternhell Group, the Cypress Group, and the law firm Davis Polk & Wardwell, the latter of which had previously employed Fed Chair Jerome Powell and NY Senator Kirsten Gillibrand – one of the authors of the Stablecoin bill. Davis Polk & Wardwell are perhaps best known for representing the Sackler family-owned Purdue Pharma, infamous for their role in the U.S. opioid crisis, and for representing major Wall Street banks and firms during the 2008 crisis while also advising the government on the design of the bail-outs, some of which were deemed quasi-illegal even by its own lawyers. Facebook also hired the lobbying firm FS Vector, which was led by partner John Collins, the former Head of Policy at Coinbase, who had previously served as senior staff for the U.S. Senate Committee on Homeland Security and Governmental Affairs which in 2013 held “the first congressional inquiry and hearing into crypto and blockchain.”

By September 2020, Brock Pierce’s Blockchain Capital, featured in The Chain of Issuance, officially joined the Libra Association, leading Libra’s Head of Policy Dante Disparte to comment that the firm “would advise on the creation of its global payment system” and “make its network of experts and industry figures available for the Association’s use.” Bradford Stephens, a co-founder of Blockchain Capital, also joined the Diem Association board. By December 2020, Facebook had announced the rebranding of Libra to Diem, in no small part due to attempts to distance the project from the social network. “The original name is tied to an earlier iteration of the project that received a difficult reception, shall we say, from regulators and other stakeholders,” CEO Stuart Levey noted at the time.

The initial white paper and project outline for Libra described a synthetic stablecoin that would be pegged to a basket of fiat currencies and government bonds or Treasuries, referred to as the Libra Reserve. According to reporting from CoinDesk in October 2019, Marcus described some alterations to these intentions, claiming that “the new path isn’t necessarily Libra’s desired option.” However, the project must remain “agile.” Marcus further stated that Libra “could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form,” and that this is “one of the options that should be considered.” The pivot from a basket to a directly tokenized fiat currency was perhaps influenced by remarks from future SEC Chair and former CFTC Chair Gary Gensler, who argued in July 2019 that “as currently proposed, the Libra Reserve, in essence, is a pooled investment vehicle that should at a minimum, be regulated by the [SEC], with the Libra Association registering as an investment advisor.” Marcus reportedly told Reuters that Facebook still intended to launch Libra in June 2020 despite the regulatory pushback: “We’ll see. That’s still the goal.. We’ve always said that we wouldn’t go forward unless we have addressed all legitimate concerns and get proper regulatory approval. So it’s not entirely up to us.”

In April 2020, Libra announced the “offering [of] single-currency stablecoins in addition to the multi-currency coin,” in its mission to become “a complement” as opposed to “a replacement for domestic currencies” while expressing a “hope to work with regulators, central banks, and financial institutions” to “expand the number of single-currency stablecoins available on the Libra network over time.” The cover letter further explained the change from solely a Libra Reserve model:

“While our vision has always been for the Libra network to complement fiat currencies, not compete with them, a key concern that was shared was the potential for the multi-currency Libra Coin (≋LBR) to interfere with monetary sovereignty and monetary policy if the network reaches significant scale and a large volume of domestic payments are made in ≋LBR. We are therefore augmenting the Libra network by including single-currency stablecoins in addition to ≋LBR.”

In addition to the stablecoin modulation, the updated white paper removed “any mention of ever introducing permissionless participation in the Libra network” with “all counterparties operating nodes in the Libra network” remaining “known to all others.” “Regulators raised thoughtful questions about the perimeter of control for the Libra network – in particular, the need to guard against unknown participants taking control of the system and removing key compliance provisions,” the cover letter states in direct opposition to the original intentions for Libra “to become permissionless.”

By November 2020, just a month before the Diem rebrand, Libra again adjusted their plans to launch a “single dollar-pegged stablecoin next year” according to reporting from the Financial Times. Libra will “simply launch as a single coin” that is “backed 1:1 by the U.S. dollar,” assuming it receives “approval from the Swiss financial regulator FINMA.” The social network still claims that “the other currencies within the basket and the composite may still be rolled out at a later time,” whereas “the dollar-pegged coin could launch as soon as January [2021].” In February 2021, Diem announced a partnership with custodian Fireblocks and First Digital Assets Group to provide “the digital plumbing to allow financial service providers such as banks, exchanges, payment service providers (PSPs) and eWallets to plug into Diem on day one.”

According to previous reporting from Unlimited Hangout, Fireblocks has significant ties to the Israeli military and intelligence state, in addition to the U.S. regulatory regime via its advisory appointments of former SEC Chair Jay Clayton and Coinbase co-founder Fred Ehrsam:

“In 2022, Israel’s Ministry of Finance and the Tel Aviv Stock Exchange established the first digital government bond with Fireblocks (a digital assets security platform). The initiative was called Project Eden and it focused on three features: “the tokenization of fiat, the tokenization of government bonds, and instructions to prompt the exchange of assets.” Fireblock’s CEO and co-founder, Michael Shaulov, was a team leader in an elite military outfit, Unit 8200 (participating in the most demanding and mission-critical IDF projects).

In 2022, Fireblocks was the highest valued digital (tokenized) asset infrastructure provider, supporting over 800 major institutions. That same year, BNY Mellon, the world’s largest custodian bank, tapped Fireblocks to develop a financial infrastructure for managing their digital assets and, since then, Fireblocks has secured the transfer of $2 trillion in digital assets.”

Fireblocks has been funded by BNY Mellon, Silicon Valley Bank, Malka’s Ribbit Capital, Mike Novogratz’s Galaxy Digital, and DRW Venture Capital, among others. Fireblock’s employees include many former Unit 8200 and IDF members, not to mention CLO Jason Allegrante who worked at the Federal Reserve Bank of New York, Davis Polk & Wardwell and the San Juan Mercantile Bank & Trust, which was founded by Nick Varelakis, a former executive of the Tether-affiliated Noble Bank founded by Brock Pierce. In October 2024, Fireblocks announced a $1 million grant program to “boost PYUSD [PayPal’s stablecoin] developer adoption.”

This partnership ultimately yielded little benefit for Facebook, however. In May 2021, the social network again pivoted to partner with Silvergate Bank to issue their U.S. dollar-pegged stablecoin and manage its reserves. “We are committed to a payment system that is safe for consumers and businesses, makes payments faster and cheaper, and takes advantage of blockchain technology to bring the benefits of the financial system to more people around the world,” stated Diem CEO’s Levey. “We look forward to working with Silvergate to realize this shared vision.” Silvergate CEO Alan Lane added his own commentary, stating “we believe in the future of U.S. dollar backed stablecoins and their potential to transform existing payment systems. We’re inspired by Diem’s technology and commitment to building a regulatory compliant payment system.” The press release accompanying the announcement would also note that Diem would be moving its operations out of Switzerland and back to the United States.

Diem’s Levey and his executive team informed the Fed and the Treasury that they were planning on launching their stablecoin with Silvergate at the end of June 2021. In a heated phone conversation, the Fed’s general counsel Mark Van Der Weide told Levey that “the government was uncomfortable condoning any project until it had put a ‘comprehensive regulatory framework’ for stablecoins in place,” while expressing “nervousness about a coin with the potential to ‘massively scale’ as Diem might.” Levey would respond publicly, while demanding “fair and equal treatment.” “Stopping a limited, legally permissible pilot while other stablecoins grow unchecked is neither fair nor equitable.” In response to the “No” from the U.S. regulatory regime, Dante Disparte, then-Executive Vice President at Diem Association, quit in frustration only to join Circle, the issuer of USDC, in April 2021.

In August 2021, Marcus appeared on Bloomberg Technology to discuss the recent developments of Diem:

“In the early days, the idea the big idea of Libra was really one that had a stablecoin that included a number of existing currencies instead of just being aligned with a dollar, which is what is being prepared now. Also it was to be regulated in Switzerland, and since then the team at Diem brought this back to the U.S. to be regulated in the U.S. given it was a dollar stablecoin that was worked on. And so now it’s basically in the process of getting approvals to move forward, and getting the proper licensing structure to actually move forward.”

Diem co-founder Catalini subsequently made comments to CoinDesk to further articulate their plans for the Silvergate collaboration, including a commitment to phase their token out once a CBDC was issued:

“What we’re really suggesting is more of a public-private partnership. We see this almost like a temporary exercise, where issuers like Silvergate in collaboration with Diem will be issuing a diem dollar, but the moment there is a CBDC … We are the only issuer of a stablecoin, to my knowledge, that committed publicly to phasing out our own token and replacing it with a CBDC token.”

Before Diem could launch their stablecoin with Silvergate, in October 2021, Facebook announced yet another partnership with Paxos, a trust company and stablecoin issuer with numerous connections to PayPal, as profiled in The Chain of Issuance. The pilot program was set to “go live in the U.S. and Guatemala” which would allow “users to start trading the Paxos Dollar (USDP)” while “crypto exchange Coinbase will provide custody services for the program.” According to a Coinbase blog post at the time of announcement, Novi users who participated in the pilot could “acquire Pax Dollar (USDP) through their Novi account,” allowing Novi users to “be able to transfer USDP between each other instantaneously,” which “Novi will hold on deposit with Coinbase Custody.” As Paxos’ Head of Strategy Walter Hessert stated in Paxos’ blog post, “This news represents a tide shift in digital assets, as it’s the first time that stablecoins are readily available in a consumer wallet outside of the crypto ecosystem.”

The very same day, October 19, 2021, a group of U.S. Senators – Brian Schatz (D-HI), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), Elizabeth Warren (D-MA) and Tina Smith (D-MI) – penned an open-letter to Facebook demanding the immediate discontinuation of the Novi pilot. According to reporting from CoinDesk, the lawmakers felt that “Facebook cannot be trusted to protect user data or manage a payments network,” in the letter published “just hours after Facebook announced it was launching a pilot program for its Novi wallet subsidiary.” Excerpts from the timely letter include the following:

“On multiple occasions, Facebook has committed not to launch a digital currency absent federal financial regulators’ approval. In prepared remarks before the House Financial Services Committee in October 2019, you said that Facebook would ‘not be a part of launching the Libra payments system anywhere in the world unless all U.S. regulators approve it.’ More recently, David Marcus, the executive overseeing Facebook’s digital currency efforts, said, ‘[w]e are definitely not going to launch without the proper regulatory framework.’

Despite these assurances, Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape – not only for Diem specifically, but also for stablecoins in general. The agencies that oversee the U.S. financial system are studying the risks that stablecoins pose to financial stability. Accordingly, they are considering how to address these inherent risks and clarify regulation and supervision of these products. As Federal Reserve Chair Powell said of stablecoins at a July 2021 Senate Banking and Housing Committee hearing, ‘They’re like money funds, they’re like bank deposits and they’re growing incredibly fast but without appropriate regulation.’ Acting Comptroller of the Currency Hsu recently likened stablecoins to the wholesale funding markets whose collapse precipitated the 2008 financial crisis: ‘In terms of ‘known knowns,’ a run on a large stablecoin could be highly destabilizing.’ Mr. Marcus has cited Facebook’s success in securing ‘licenses or approvals for Novi in nearly every state,’ and concluded that ‘Novi is ready to come to market.’ To be clear, your ability to secure state-issued money transmitter licenses is not equivalent to obtaining the blessing of ‘all U.S. regulators,’ as you said in your testimony two years ago.

In addition to the risks products like Diem pose to financial stability, you have not offered a satisfactory explanation for how Diem will prevent illicit financial flows and other criminal activity. The intergovernmental Financial Action Task Force warned in a report to the G-20 finance ministers that stablecoins’ ‘propensity for mass-adoption makes them more vulnerable to be used by criminals and terrorists to launder their proceeds of crime and finance their terrorist activities.’ The President’s Working Group on Financial Markets said in December 2020 that stablecoins ‘are likely to attract illicit actors and, without appropriate mitigation measures, allow evasion of key public policy objectives.’

Unfortunately, Facebook’s decision to pursue a digital currency and payments network is just one more example of the company ‘moving fast and breaking things’ (and in too many cases, misleading Congress in order to do so). Time and again, Facebook has made conscious business decisions to continue with actions that have harmed its users and the broader society. Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient.”

The letter concluded, “We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”

The Dismantling of Libra

Despite the pivots, despite the new partners, and despite pandering to regulators across the globe, Diem never actually made it to market. Surprisingly, Facebook and its Libra/Diem agents were quite open in their acknowledgments that this was a likely final outcome, one foreseen by some even from the start of the project. In a conversation with CNBC in November 2019, Marcus was asked by Andrew Ross Sorkin, “What did you think was gonna happen then in terms of the expectation for how [Libra] would roll out and play out in the public?” Marcus’ answer was brief and to the point: “Well, almost as it actually happened.” In line with this sentiment, Facebook itself acknowledged that regulatory issues may be an insurmountable barrier to its Libra project in their quarterly report to the SEC in June 2019:

“Libra is based on relatively new and unproven technology, and the laws and regulations surrounding digital currency are uncertain and evolving. Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue. As a primary sponsor of the initiative, we are participating in responses to inquiries from governments and regulators, and adverse government or regulatory actions or negative publicity resulting from such participation may adversely affect our reputation and harm our business.

As this initiative evolves, we may be subject to a variety of laws and regulations in the United States and international jurisdictions, including those governing payments, financial services, and anti-money laundering. In many jurisdictions, the application or interpretation of these laws and regulations is not clear, particularly with respect to evolving laws and regulations that are applied to blockchain and digital currency. These laws and regulations, as well as any associated inquiries or investigations, may delay or impede the launch of the Libra currency as well as the development of our products and services, increase our operating costs, require significant management time and attention, or otherwise harm our business.

In addition, market acceptance of such currency is subject to significant uncertainty. As such, there can be no assurance that Libra or our associated products and services will be made available in a timely manner, or at all.”

In a conversation with Harry Stebbings of 20VC, Marcus explained how the failure to convince regulators on the merits of Diem led him to call it quits:

Marcus: “When I think about the Facebook adventure with Libra – I still call it Libra because it’s a better name than Diem – when I basically decided it it was not worth fighting for it anymore, I felt really good, like really, really good, that we had tried everything in our power and then some to convince regulators and world powers, basically, that this was something of merit and that the world needed, but it just wasn’t going to happen.”

Stebbings: “What was the core reason it wasn’t going to happen?”

Marcus: “I think it was just really hard for regulators and others to accept that Facebook would be at the center of a protocol for money for the internet. And actually that any private company would be at the center of that and that’s why we devolved so much power into this consortium that we didn’t control, that we’re just a member of, but that wasn’t enough. And I think that the political – it was very political to be clear – and I think the political pressure on regulators to not enable a company with the reach of Facebook to actually be at the helm of such a project was just insurmountable.”

In an August 2023 conversation with Bankless, Marcus furthered these sentiments while articulating that “Unfortunately, no one actually believed the power dynamics behind it,” and that the “brand association with Facebook at the time was just not palatable from a political standpoint.” Marcus even went so far as to confirm that “the project was killed or shut down by the government.”

The fact that the government would be so hostile to Facebook’s digital currency efforts is interesting in light of the fact that Facebook was one of the vehicles used to privatize controversial U.S. military surveillance projects after 9/11. Shortly after Peter Thiel and associates created Palantir with CIA funding to privatize, and thus rescue, DARPA’s then-embattled Total Information Awareness program, Thiel became Facebook’s first significant investor at the behest of Sean Parker, whose first contact with the CIA took place at age 16. What Facebook became after the involvement of Thiel and Parker bore such an uncanny resemblance to another shuttered DARPA project of the same era, known as LifeLog, that LifeLog’s architect has even noted the direct parallels. One of these parallels, though left unmentioned by former DARPA project managers, is the fact that Facebook launched the very same day that LifeLog was shut down. Facebook’s long-standing ties to the military/intelligence communities, which go far beyond its origins to revelations about its collaboration with spy agencies as part of the Snowden leaks and its role in influence operations – some of which have involved the Thiel-founded Palantir – makes one wonder if the animosity of the government toward Facebook’s digital currency ambitions was merely a smokescreen and that the real intent was in perfecting the public-private partnership of capital creation for the digital age, specifically its surveillance potential.

Despite the predicted failure to launch, Marcus recognized that Libra “served as a blueprint for a lot of projects that came after.” As Lisa Ellis of Moffet Nathanson explained to FT, Diem “forced regulators and governments to start to educate themselves on the technology and stimulated venture capital investment in other initiatives because there was such a frenzy of focus.”

These sentiments were seemingly confirmed in both the projects later headed by former Libra staff, not to mention the venture capital invested in said businesses. While Marcus’ LightSpark will be discussed later, Sui and Aptos, two “descendants” of Libra raised $300 million and $350 million respectively, both leveraging Libra’s Move programming language. Aptos was funded by Andreessen Horowitz, Multicoin Capital, 3 Arrows Capital, Tiger Global, FTX Ventures and Coinbase Ventures. Sui, the blockchain built by Mysten Labs which added native USDC availability in October 2024, was founded in September 2021 by four former members of Libra. Mysten Labs, which co-authored a troubling paper with O.N.E. Amazon’s co-founders – including the architect of BlackRock’s ETFs, Peter Knez, as described in previous reporting from Unlimited Hangout – is deeply tied to Facebook and its Libra/Diem project. Evan Cheng, Mysten’s co-founder and CEO, was previously the head of Research and Development at Novi Financial, while Sam Blackshear, another co-founder and the CTO of Mysten Labs, was previously the Chief Engineer at Novi, having contributed significantly to the creation of the Move programming language used by Libra/Diem while at Meta. The founding team at Mysten also includes Adeniyi Abiodun and George Danezis, key contributors to Diem’s stablecoin and the aforementioned Move programming language.

In January 2022, the Diem Association formally folded by announcing the sale of its intellectual property related to the Diem Payment Network to their former partner, Silvergate Capital Corporation for $182 million. In the press release, Diem’s CEO Levey eulogized Facebook’s effort, claiming that despite “a senior regulator inform[ing] us that Diem was the best-designed stablecoin project the US Government had seen,” and “despite giving us positive substantive feedback on the design of the network,” it “nevertheless became clear from our dialogue with federal regulators that the project could not move ahead.” Levey commented on the continuing intentions of Libra even after the sale, stating that “we remain confident in the potential for a stablecoin operating on a blockchain designed like Diem’s to deliver the benefits that motivated the Diem Association from the beginning.”

Unfortunately for Levey, and those behind the efforts of the social network’s crypto project, Silvergate itself would be shutdown in March 2023, by the very same regulators that had first shuttered Libra.

The Regional Banking Crisis

Silvergate Bank was founded as a savings and loan association in 1988 by Dennis Frank and Derek Eisele. In 1996, Frank, an ex-Goldman Sachs banker, reorganized the S&L into a regional bank servicing the Southern California area after recruiting investors he had met from his stint at Goldman. Frank convinced the board of Silvergate to cease its mortage operations in 2005, a few years before the subprime debacle. Thus, when the Great Financial Crisis struck in 2008, Silvergate remained solvent and ready to lend. At the onset of the crisis, Frank asked Alan Lane to join the bank as CEO, having spent time at Independence One Bank, Business Bank of California, and Southwest Community Bancorp. According to reporting from CNBC, Lane shared that Frank told him “I’m a Wall Street guy and I need a banker as a partner, would you join me?”

While the bank’s books were balanced, the standard issue of banking remained: how to garner customer deposits in order to fund loans. At the start of the 2010s, Silvergate would turn towards the oft-unbanked cryptocurrency industry to fill their coffers. In 2013, Lane purchased his first Bitcoin, partially out of interest in a new industry, and partially out of fear of how this upstart currency could disrupt the banking sector at large. “I thought ‘uh oh, what am I gonna do?'” Lane expressed upon discovering the blockchain. “I put two and two together and I thought, well it might disrupt banking long-term but in the short-term these companies need banks. They’re not doing anything wrong. They’re not doing anything illegal or immoral. If they were we wouldn’t be banking them.”

In 2013, Lane brought in the executives from a handful of “young crypto exchanges” in order to assess their areas of friction, and how Silvergate could help the blossoming blockchain industry. A year prior, Silvergate had received Federal Reserve status, and in the Summer of 2014, Lane had invited the California State Banking Department board and the Federal Reserve Bank of San Francisco to share what he had learned from the exchanges, and more specifically present the merits of Bitcoin. “That open communication with the regulators early on has proven to be really foundational,” Lane would share. “We’re very collaborative with the regulators, we ask them if they have suggestions, and what we can do better.”

Silvergate quickly added the Winklevoss twin’s Gemini exchange, Paxos, Kraken, and others to their list of crypto-clients, helping the bank source much needed deposits, while also providing an olive branch to a smattering of mostly unbanked blockchain stalwarts. As FTX’s Sam Bankman-Fried put it himself in a now-deleted testimonial on Silvergate’s website, “Life as a crypto firm can be divided up into before Silvergate and after Silvergate. It’s hard to overstate how much it revolutionized banking for blockchain companies.” In January 2014, Silvergate brought on on their first crypto customer, SecondMarket, a firm started by Barry Silbert of the not-yet-founded Digital Currency Group.

SecondMarket was built to facilitate the sale of private securities, such as shares of companies not yet publicly listed. Its investors included FirstMark, Chamath Palihapitiya’s Social Capital, Temasek Holdings, Silicon Valley Bank, and Li Ka-shing among others, the latter being the controversial father of Block.one investor, Richard Li, as noted in The Chain of Consensus. SecondMarket was also advised by Steven Bochner – a former Chairman of the board of directors at Nasdaq, a former member of the board at the SEC, and a member of the board at the Federal Reserve Bank of San Francisco – in addition to being advised by Alan Denenberg, a partner at Davis Polk & Wardwell.

SecondMarket later rebranded as Genesis Trading in April 2015 with Genesis Trading naming their new CEO, Brendan O’Connor, after Silbert resigned in July 2014 in order to form the Digital Currency Group. O’Connor told CoinDesk that Genesis Trading was “the largest over-the-counter market maker” in cryptocurrency, as well as being the “first broker-dealer in the U.S. regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) to actively trade bitcoin.”

Nearly a decade later, both Genesis Trading and Silvergate would find themselves caught in the middle of the Terra-LUNA and FTX controlled demolitions. Terra’s Do Kwon accused Genesis Trading, via their subsidiary Genesis Asia Pacific, of collaborating with Sam Bankman-Fried’s FTX and Alameda Research in order to attack the peg of the algorithmic stablecoin TerraUSD, known as UST. Kwon, in a series of tweets dated December 7, 2022, suggested that “the time has come for Genesis Trading to reveal if they provided the $1B USD shortly before the crash to SBF or Alameda.” The $1 billion dollar purchase was indeed brokered by Genesis Trading’s Asia Pacific, in addition to another $500 million sourced from Three Arrows Capital, with the deal being officially announced as closed on May 5, 2022. Genesis Trading’s own Twitter account explained that “the Genesis aspect of the deal represents the first of its magnitude, with Genesis Asia Pacific Pte. Ltd. taking on 1 billion UST in exchange for $1 billion worth of BTC.” By May 12, Terra’s LUNA had lost 99.7% of its value, and the $1 billion of UST stable now held by Genesis was effectively worthless.

Kwon also questioned SBF himself, specifically looking for answers as to why his trading desk Alameda had borrowed over $1 billion worth of Bitcoin from Voyager during the de-pegging, alluding to possibility that the borrowing was related to a large short position on the Terra ecosystem. Kwon would also “reveal” that Alameda was responsible for the “large currency contraction that UST went through in Feb 2021” due to Alameda selling 500 million in UST “in minutes” to “drain the Curve liquidity pools during the Magic Internet Money (MIM) crisis.” FTX would officially lose around $100 million on the failure of LUNA. However, reporting from the New York Times would back Kwon’s assertion that SBF’s firms were behind the massive sell orders of TerraUSD. As covered inThe Chain of Consensus, the fallouts of Terra-LUNA’s collapse were crucial in creating the context that later led to FTX’s insolvency. It is of note that the Bitcoin that had once backed Terra-LUNA’s stablecoin was algorithmically liquidated via Binance, which was a long time banking client of Silvergate, having reportedly moved some $50 billion for the exchange through Silvergate accounts since 2019. The CEO of FTX’s Digital Markets, Ryan Salame, asserted via a Tweet that “Silvergate advised all our banking activity.” In the aftermath of their bankruptcy filing, FTX revealed that Genesis Global Capital “turned out to be the largest unsecured creditor of FTX” to the tune of $226.3 million owed.

The SEC went on to sue Silvergate for their participation in the FTX scandal, with the July 2024 suit claiming “SCC, Lane, and [former Chief Risk Officer Kathleen] Fraher misrepresented the operational and legal risks facing the Bank by falsely stating in SEC filings and other public statements that the Bank had an effective BSA/AML compliance program tailored to the heightened risks posed by its crypto asset customers.” According to reporting from Blockworks, the Silvergate staff “were able to trace $9 billion worth of transfers from FTX-related entities,” yet the lawyers at the SEC wrote: “Most troubling to the BSA staff was the trend of funds that flowed from FTX’s custodial accounts — which held FTX customer funds — to a series of non-custodial FTX-related entities’ accounts, followed by transfers of these funds to other third parties — either through the SEN or to accounts external to the Bank.” According to reporting from NYMag, SEC filings showed that “funds intended for FTX were deposited into the Silvergate account of an Alameda subsidiary” in order to “hide the fact that they were going to Alameda.” This subsidiary, North Dimension, claimed to be “an online electronics retailer” according to “a now-defunct website that appears to have been fake since nothing could be purchased on it.”

SEN, or the Silvergate Exchange Network, had become a critical piece of infrastructure for inter-exchange settlement in addition to providing much needed settlement services for stablecoin providers. As Alan Lane explained on Bloomberg’s OddLots podcast in 2022:

“We are the regulated on-ramp from the U.S. dollar and other fiat currencies into the bitcoin and digital asset market. And then likewise, we are the off-ramp from that the digital asset market back into fiat currencies… So let’s talk about the stablecoins. The stablecoin issuers who use our platform are all of the regulated, U.S. dollar-backed stablecoin issuers… We don’t bank the algorithmic stablecoin offerings, nor these other stablecoins that are maybe collateralized by other digital assets. Those don’t need a U.S. dollar bank because they’re not backed by USD. Importantly, we also don’t bank Tether and believe it or not, we had the opportunity to work with Tether very early on but because they weren’t inside the United States. And, you know, again we are very serious about regulation, and so we looked at it and we thought you know this is an interesting idea… But they’re offshore. We can’t really get our hands around their regulatory status in the United States and so we were not able to bank them back then. This was back in 2017, nor do we bank them today. So that’s what we don’t do.

What we do is for USDC, for the Pax Dollar which is issued by Paxos, for the Gemini Dollar issued by Gemini and for TrueUSD. They use the SEN and our API for the minting and burning of their tokens. Those tokens are issued when a dollar hits their Silvergate bank account and it’s all programmatic. So if somebody wants to purchase USDC from Circle, what they would do is they would send dollars into Circle’s bank account at Silvergate. And when those dollars hit the bank account then, at that moment, there is an API call from Silvergate to Circle that says ‘we just received x amount of dollars from this customer.’ And at that point, Circle knows we have the dollars in our possession. So they turn around and they mint the USDC token and send it to the wallet address of that institution that is looking to purchase the USDC. And then the same thing happens in reverse. If someone wants to redeem their USDC and go back to U.S. dollars, they send the USDC to the wallet at Circle. Circle, at that point, once they have possession of the USDC, they then send an instruction to us via API and we then, in turn, will send the dollars back to that prior USDC token holder.”

According to a SEC filing with data as recent as October 2018, Silvergate serviced 35 digital currency exchanges, including “the 5 largest U.S. domiciled digital currency exchanges,” holding just over $792 million of deposits. The filing stressed the importance of SEN, while also highlighting the substantial growth of Silvergate’s “digital currency initiative.” In 2014, with only 8 customers, the bank held $6 million in crypto-related deposits, whereas by 2018, the bank had 483 crypto clients, with $1.6 billion in deposits on the bank’s books.

It was also in 2018 that Silbert’s Digital Currency Group invested in Silvergate Capital Corporation itself, selling 9.5 million shares for $114 million in funds to “further support the bank’s fintech deposit initiatives.” By November 2020, Bitcoin custodian and stablecoin bank Xapo – featured in The Chain of Custody – would lose their Director of Institutional Investments, the 13-year Morgan Stanley vet Jonathan Melton, after he announced he was to join Silvergate as the Director of Digital Asset Lending, in part to help expand the bank’s SEN Leverage product. In June 2021, the former CLO at Coinbase, Michael Lempres, joined Silvergate as Chairman, taking over for Dennis Frank. Prior to Coinbase, Lempres was an executive at Andreessen Horowitz and a senior attorney at Silicon Valley Bank. At SVB, Lempres was instrumental in working with regulators to expand their booming cryptocurrency clients, and even started working at SVB’s customer, Bitnet Technologies, in 2015. BitNet was formed by former Visa employees after Visa purchased payment infrastructure firm Cybersource in 2010, and was funded by Blockchain Capital, Digital Currency Group, and Stephens Investment Management. In 2016, Lempres was additionally elected the mayor of Atherton, a small town in Silicon Valley that boasts Google’s Eric Schmidt and Facebook’s Sheryl Sandberg as residents. In the same announcement, Silvergate would add Aanchal Gupta, a former risk and security manager at Microsoft, Facebook, and Yahoo!, to its board. In 2019, Antonio Martino joined Silvergate as CFO, having been a senior manager at Bank of Montreal prior to 17 years at Citigroup.

In July 2021, Silvergate announced they had garnered $4.3 billion in new deposits from “new and existing digital currency customers” in Q2 of 2021 alone. The lion’s share came from crypto exchanges, which “deposited $2.4 billion in cash during the quarter,” while institutional investor deposits “grew by $1.8 billion.” Silvergate noted that 120 new digital currency customers were added in the quarter, bringing their total to 1,224, while the bank’s SEN had “processed 137,947 transactions and transferred $239.6 billion over the network” during the quarter. In the announcement, Lane commented on the growth of deposits, while speculating that future growth might come from a venture such as Facebook’s Diem:

“In the second quarter, average deposits from digital currency customers grew by $3.5 billion to $9.9 billion. Driven by the record volume we experienced on this, we are prudently deploying these deposits into interest earning assets, including the purchase of $4.5 billion of both short and long duration securities during the quarter…We are looking at our capital needs and anticipated growth to be capital efficient and having runway to support that growth. We’re also looking at off balance sheet mechanisms to take on that growth that might come from a stablecoin project like Diem.”

Of importance in regards to the bank’s eventual failing, Silvergate’s Tier 1 leverage ratio, which “measures equity capital against risk-weighted assets,” stood “well above the regulatory threshold of 5% at 7.9% this quarter” but down from “the 9.68% level it was at in the first quarter of this year [2021].” As noted above, Diem was shut down and its assets sold to Silvergate at the end of January 2022. On March 29, 2022, Silvergate issued a $205 million Bitcoin-collateralized loan with MacroStrategy, a subsidiary of Michael Saylor’s MicroStrategy, in the Washington, DC-based software company’s now-successful attempt to become one of the largest Bitcoin holders in the world. Interestingly, one of the other largest Bitcoin holders in the world, Block.one/Bullish Global, had taken a $225 million loan itself from Silvergate just the day before, on March 28, according to an SEC filing. Silvergate was quickly becoming an indispensable pillar in the cryptocurrency industry, but before 2022 could close, the entire industry, Silvergate included, would find itself scrambling to make depositors whole.

On November 7, 2022, Tyler Pearson, the son-in-law of CEO Lane, was demoted from his position of Chief Risk Officer, in addition to other executive level shakeups. Four days later, on November 11, FTX filed for Chapter 11 bankruptcy. Less than two weeks later, on November 23, Block.one CEO Brendan Blumer purchased a 9.27% stake in Silvergate, promptly upping the investment to 9.9% the next month, making EOS’s developer Block.one the largest single investor in Silvergate. According to reporting from Protos, Citadel Securities and Cathie Wood’s ARK Invest also purchased millions of dollars worth of shares of Silvergate, while millions worth of “advances from the Federal Home Loan Bank (FHLB) were taken out by Silvergate.”

On December 5, Silvergate filed a letter with the SEC where Lane claimed “we conducted extensive due diligence on FTX and Alameda Research,” and “we have a resilient balance sheet and ample liquidity.” However, a month later, on January 5, 2023, Silvergate revealed that, due to its client FTX collapsing, a massive bank run had taken place, with $8.1 billion, over 68% of its deposits, leaving the bank in Q4 2022. This quickly “led to an acute liquidity crunch, which forced Silvergate to sell off illiquid securities for a loss of over $700 million and to borrow $4.3 billion in short-term advances from Federal Home Loan Banks.” Likely in response to the balance sheet revelation, the price of Silvergate stock “declined by $11.54 per share, or 22.6%, from a closing price of $50.96 per share on November 7, 2022, to a closing price of $39.42 per share on November 8, 2022,” on “unusually high trading volume,” as noted by Cohen Milstein’s case study. Silvergate also announced they fired about 40% of their workforce, with 200 employees receiving pink slips.

Despite the tanking stock price, and accusations of fund mismanagement, Silvergate instead saw a string of positive announcements from traditional investment stalwarts as the winter of 2023 carried on. On January 31, 2023, Larry Fink’s BlackRock– a major shareholder in FTX – reported a 7% stake in Silvergate, after a filing with the SEC revealed that the firm increased their position from the previously reported 5.9%. Two days later, on February 2, State Street reported a 9.32% stake in Silvergate, while on February 14, Citadel Securities also revealed a 5.5% stake in the California-based bank.

While the traditional asset managers were seemingly buying up the deeply-discounted shares, March 2023 would fare far worse for Silvergate’s digital currency clients. On March 2, Coinbase, Michael Novogratz’s Galaxy Digital, Paxos, Circle, CBOE’s Digital Markets, Crypto.Com, Gemini, LedgerX and Bitstamp all suspended banking partnerships with Silvergate. The next day, March 3, Silvergate announced that SEN would be shut down “effective immediately,” after making a “risk-based decision.” This was likely due in part to a bankruptcy judge ordering the bank to release nearly $10 million to their former client, BlockFi, an issue which was ordered the same day.

Signature Bank, which failed two days after Silicon Valley Bank, had its own inter-crypto exchange network, known as Signet. Signature had relationships with many cryptocurrency companies, many of which had begun in 2018, including Circle, Coinbase, Kraken and even FTX. The bank was to the New York Community Bancorp subsidiary, Flagstar Bank, one week after the FDIC assumed control of Signature. Trump’s Treasury Secretary, Steve Mnuchin, would later lead an investment package to rescue NYCB with $1 billion in March 2024, leading the firms to rename the now-merged banks into Flagstar Financial in October 2024. Joseph Otting, a “longtime banking executive and close ally of Mr. Mnuchin,” the former President of OneWest Bank and the Chief Operator at Trump’s OCC before Brian Brooks, would become its CEO.

On March 7, Block.one, by then known as Bullish Global, liquidated its Silvergate position after expressing concerns about the bank’s inability to file its 10-K and the bank’s announcement of the shut down of SEN, revealing it had “no exposure to Silvergate.” The next day, March 8, Silvergate shut down operations after a voluntary liquidation to federal regulators. Certainly, a voluntary liquidation is an unusual happening in the banking industry, and thus there has been much speculation as to why Silvergate would do such, including a well-researched piece from Pirate Wires suggesting that the Biden administration’s regulators used “an informal mandate” which limited “crypto deposits at 15 percent” to bring the bank down.

While the exact reason why the bank shuttered will likely never see the light of day, there were certainly firms that benefited from the voluntary liquidation. On March 23, MicroStrategy announced they were able to repay their loan early due to the bank’s closure “without prepayment fees” and at a “21% discount,” paying only $161 million of the $200 million owed. On March 8, the day the bank was closed, Marathon Digital, which had opened a $200 million line of credit from Silvergate, announced they had halted its credit facilities, helping remove nearly $50 million in debt and save around $5 million in annual borrowing costs.

A month before the bank liquidated, on February 14, Yahoo! reported that George Soros’ Soros Fund Management, in addition to its sizable investments in Marathon and MicroStrategy, had placed “100,000 shares worth of put options” via a short position on the soon-to-be-shutdown Silvergate. Short sellers during the regional banking crisis made over $3.5 billion in mark-to-market profits in March 2023 alone, with Silicon Valley Bank and Signature Bank – the second- and third-largest bank failures respectively in U.S. history – having been in the top 20 most-shorted regional bank stocks, according to reporting from Yahoo!.

The Silicon Valley Bankruptcy

Silicon Valley Bank was founded in October 1983 by Stanford professor Bob Medearis and Wells Fargo executive Bill Biggerstaff, after the two former Bank of America managers decided to found a bank to fund an infantile Silicon Valley. The idea for the bank first emerged during a game of poker in Pajaro Dunes, California that featured Starr Colby, who was the head of Lockheed’s “pilot-less drone program” at the time. Medearis claimed the deregulation from the Reagan administration created the environment for such a financial institution, and the lack of venture capital in the region created ample opportunity to finance the students and entrepreneurs, kickstarting the computer revolution in earnest.

According to reporting by Vox, by 2021 SVB claimed to bank “nearly half of all U.S. venture-backed startups,” not to mention being a banking partner for “a lot of the venture capital firms” that fund those startups. By the time of its failure in March 2023, SVB held more than $200 billion in assets for California’s tech industry, making it the largest bank to fail since the Great Recession. But before it failed, the bank had become an indispensable pillar in the FinTech industry of the valley. Dallas Business Journal‘s Mark Calvey reported that executives at SVB had told him that “the bank’s focus on working closely with VCs and their portfolio companies was actually a way to reduce risk.” According to Calvey, if “top-tier venture firms,” such as Sequoia or Kleiner Perkins, were “pouring millions into a promising startup,” SVB felt “more comfortable in extending venture debt.” The once Treasurer of Silicon Valley Bank, David Jaques, went on to join PayPal extremely early in the company’s history, helping the firm properly comply with banking regulations.

Unfortunately, it was some of these venture capital stalwarts that would later help trigger the run that would bring the bank down on March 10, 2023. Two days before, on March 8, SVB Financial Group, the parent company of the bank, announced it would undertake a $2.25 billion share sale after offloading $21 billion worth of securities at a $2 billion loss. Deposits at the bank had soared after unprecedented pandemic-era stimulus coincided with effectively zero-percent interest rates, leading the bank to invest in longer duration bonds in the search of yield. While the purchase of U.S. government debt is often considered risk-free, banks that get stuck holding long duration bonds during an interest rate hike – such as the fastest rate hike in U.S. banking history in 2022-2023 after the highly inflationary period during government lockdowns – often have to sell at a loss before the bonds can mature to cover fleeing deposits.

Astute venture funds that had their money in SVB – often in egregious excess of the FDIC’s insurance limit of $250,000 – such as Peter Thiel’s Founders Fund and Fred Wilson’s Union Square Ventures advised their clients to pull their deposits out of the bank before the losses tallied higher. On March 9, the top executives at Founder’s Fund decided to move the firm’s capital to an assortment of larger banks, with their CFO Neil Ruthven stating, “Thursday morning [March 9] it was clear we were in the middle of a bank run, and we reacted in line with our fiduciary duties.” Other firms, such as Sequioa Capital, Coutue, and the several unnamed founders that shared comments privately to Axios, also moved their funds out of SVB that day as well. The Information reported that Union Square Ventures directed companies in their portfolio to “only keep minimal funds in cash accounts.” According to reporting from John Titus for BestEvidence, 10 customers alone had $13 billion in deposits at SVB, while $42 billion would leave the bank in just 6 hours. By the end of the day, the bank’s shares would drop over 60%, taking out nearly $9.4 billion in the stock’s market cap.

The priming for such a bank run, however, was far from built in a day. While the match in this regional banking bonfire was these aforementioned, influential VC firms advising partners to quickly pull funds, the tinder was these “killer whale accounts” depositing billions beyond typical FDIC insurance and the kindling was the bank investing in long duration bonds during a low interest rate environment. Ultimately, the fuel wood itself was the Trump administration’s deregulation of the banking industry in 2018.

In an effort to defang the Democrat-led Dodd-Frank regulation during the Obama administration, the Republican-controlled Congress passed legislation in May 2018 that weakened certain restrictions on banks, specifically upping the “too-big-to-fail” threshold from $50 billion in total assets to $250 billion as it relates to specific reporting and capital requirements. Due to this change, all three of the banks that failed in 2023 no longer had to “undergo stress tests,” or “submit so-called living wills,” both of which are “safety valves designed to plan for financial disaster.”

The bill, signed by President Trump and known as the Economic Growth, Regulatory Relief and Consumer Protection Act, lifted this provision to $100 billion for 18 months, and eventually raised it to $250 billion in an effort to make it easier for smaller banks to lend more and save costs on reporting and stress testing. Banks with less than a quarter trillion in assets would no longer need to undergo annual stress tests conducted by the Federal Reserve, nor would they have to conduct their own semiannual tests. In addition, banks with under $10 billion in total assets would no longer have to honor the Volcker Rule, named after former Fed Chair Paul Volcker, which banned banks from proprietary trading and made it illegal for banks to “place bets with money from deposits.” Finally, the capital requirements for banks no longer deemed “systemically important financial institutions” were loosened, freeing up capital for increased lending.

Senator Elizabeth Warren of Massachusetts, a proud heel of cryptocurrency, would specifically point to these reforms as being a critical component to the bank’s failure, stating: “President Trump and congressional Republicans’ decision to roll back Dodd-Frank’s ‘too big to fail’ rules for banks like SVB – reducing both oversight and capital requirements – contributed to a costly collapse.” Of note, as reported by The Lever, SVB had spent “more than half a million dollars on lobbying” to “hike the regulatory threshold to $250 billion” in 2015. Despite the bank itself having pushed for the exact regulation that helped set up its failure, many prominent financial figures came out in defense of the customer deposits, including Bill Ackman, Larry Summers, PayPal’s David Sacks, and Sam Altman.

Even Treasury Secretary Janet Yellen stated “We are concerned about depositors and we’re focused on trying to meet their needs.” According to reporting from The Washington Post at the time of the bank’s failure, “Federal authorities are seriously considering safeguarding all uninsured deposits at Silicon Valley Bank, weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system.” The Post further noted that “Although the FDIC insures bank deposits up to $250,000, a provision in federal banking law may give them the authority to protect the uninsured deposits as well if they conclude that failing to do so would pose a systemic risk to the broader financial system. In that event, uninsured deposits could be backstopped by an insurance fund, paid into regularly by U.S. banks.”

Former Treasury Secretary and former Xapo advisory board member Larry Summers called for quick action to protect deposits, stating “What is absolutely imperative is that, however this gets resolved, depositors be paid back, and paid back in full…this is not the time for moral hazard lecture.” The former COO of PayPal, David Sacks, tweeted “Where is Powell? Where is Yellen? Stop the crisis NOW. Announce that all depositors will be safe. Place SVB with a Top 4 bank. Do this before Monday open or there will be contagion and the crisis will spread.” OpenAI’s CEO Sam Altman similarly tweeted that “TL;DR: at this point, to be certain of avoiding catastrophe, the FDIC needs to temporarily guarantee all deposits. other solutions might work, but this is the best one.” On March 12, two days after the bank failed, the Treasury, the Fed and the FDIC announced “steps to ensure deposits will be paid in full,” stating:

“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary [Janet] Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors… Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”

Endeavor board member Matt Harris – a Bain Capital Venture partner and NY Fed Fintech Advisory Group member discussed in The Chain of Custody – commented on the hypocrisy of the moment, tweeting “Looking forward to the tweets from the VCs who sparked this bank run congratulating themselves on their prescience.” According to their website, Silicon Valley Bank was an official bank partner of Endeavor.

While the U.S. regulators showed up at the right time to help ensure depositors were made whole, only a few weeks before SVB went under, the bank’s CEO, Greg Becker, had already begun offloading shares of the soon-to-be-collapsed bank. According to reporting from Newsweek, Becker had sold “more than $3.5 million in stocks,” with a February 27 filing with the SEC demonstrating that precisely “$3,578,652.31 in common stock” was liquidated “two weeks before SVB was shut down by federal regulators.” These 12,451 shares sold would account “for 10 percent” of “his roughly 98,000 shares,” while another SEC filing would show that the bank’s Chief Financial Officer, Daniel Beck, had also sold “$575,180 in stocks” on “the same February day.” SVB also reportedly paid out bonuses to U.S. employees mere hours ahead of the take over by regulators.

It wasn’t just executives at the banks, or Soros’ short positions, that benefited from the regional banking crisis. According to a study from McKinsey, deposits flowed “out of midsize U.S. banks after the regional banking crisis,” while “the largest and smallest banks added deposits.” One of these “smallest banks” was a new entity known as Mercury, which was founded in 2017 and has raised over $163 million from investors such as Andreessen Horowitz, Coatue, Naval Ravikant, Ron Conway’s SV Angel, and CRV as well as “angel investors, athletes, entertainers and customers.” Mercury saw more than $2 billion in deposits in the first handful of days after SVB’s collapse, with around 8,700 new customers in March 2023 alone. “It was by far our biggest month we’ve had at Mercury, a huge inflow,” Mercury CEO and co-founder Immad Akhund told TechCrunch. “We tried to prioritize people coming from SVB and even built some tools so they could connect to SVB accounts… We were already growing and we saw an approximately 20% jump because of what happened with SVB.” By July, Mercury had seen over 26,000 new customers since March’s regional bank crisis.

While the immediate uncertainty of the bank failure surely ruffled some feathers of the various depositors at SVB, the U.S. regulatory system promised to make them whole, and thus clients such as Sequoia Capital, the Tencent-backed Kanzhun, the Bezos, Milner and Mubadala Investment Company-backed Altos Labs, among others, would all escape unscathed. SVB’s largest creditor aided by the government rescue was be the issuer of the stablecoin USDC, Circle Internet Financial, which had had $3.3 billion deposited at the bank. According to a press release from Circle, this amounted to about 8% of the USDC total reserve, with a remaining 77% of its reserve being collateralized short-dated U.S. Treasury bills held by BNY Mellon and managed by BlackRock.

In the failure of SVB, USDC would “depeg” from the USD, falling as low as 86 cents. Howard Lutnick, the CEO of Cantor Fitzgerald which custodies Tether’s Treasury holdings, took a dig at Circle during his speech at the Bitcoin2024 conference in which he stated: “Think about it: Circle had USD $3.3 billion of your reserves uninsured in the Silicon Valley Bank when it went bust.” Tether’s Paolo Ardoino also commented on the situation, saying “You might remember that I was very public about my concerns about MICA and the requirement of 60% in non-insured cash deposits, like what happened to Circle with Silicon Valley Bank in 2023. They lost $3 billion and then survived because the FDIC stepped in.”

Despite allegations of starting the bank-run himself, PayPal co-founder Peter Thiel claimed to lose $50 million personally with the failure of SVB. Thiel’s Founders Fund had been investing in Bitcoin since 2014 and realized nearly $2 billion in profits from their 8-year cryptocurrency investment in March 2022, when Bitcoin was nearly $50,000 a coin. Founders Fund would begin investing again in the digital asset industry shortly after the banking crisis, putting $100 million each in Bitcoin and Ethereum.

Six months after the crisis, in August 2023, PayPal announced their own stablecoin, PYUSD, with all eyes turning towards Congress for the legislative clarity via their oncoming regulation that would determine the winners and losers of the “Great Stablecoin War.” The House Financial Services Committee’s Republican chair, Representative Patrick McHenry, commented that the PYUSD announcement was an indication that stablecoins “hold promise as a pillar of our 21st century payments system.”

Two weeks before Paxos and PayPal launched PYUSD, the U.S. House Financial Services committee advanced the first iteration of their stablecoin bill. McHenry stressed the importance of the bill, stating: “We are currently at a crossroads to keep America at the forefront of digital asset innovation. Congress is making significant, bipartisan progress on legislation to ensure the U.S. leads the financial system of the future.”

The Consolidation: The Gillibrand-Lummis Stablecoin Bill

Since 2022, the efforts to pass legislation dealing the crypto industry have been largely spearheaded by Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY). The two female senators, who both receive a significant amount of funding from the crypto industry, tried but failed to get their first attempt at a crypto oversight bill passed in 2022 as did their second attempt in 2023. The Gillibrand-Lummis bills have generally favored giving the CFTC more oversight over the industry than the SEC (leading to criticism from the SEC’s Gary Gensler) while the most recent iteration would ban algorithmic stablecoins and ensure that stablecoin regulations are used to maintain “the U.S. dollar’s dominance.”

Ultimately, the bill – among other things – is seen as encouraging banks to begin issuing dollar-pegged stablecoins, having them compete directly or form alliances with existing stablecoin issuers like Circle, Paxos and Tether. Over the past few years, where concern over a Central Bank Digital Currency (CBDC) has become prominent in the U.S. and elsewhere, top crypto executives – like Coinbase’s Brian Armstrong – as well as CIA veterans have stated quite plainly that dollar-pegged stablecoins were to become the U.S.’ de facto CBDC in order to give the U.S. a “first-mover advantage” in digital currency issuance, as dollar stablecoins are “already here” whereas a CBDC would take years to develop. In addition, the policy of the Federal Reserve since last year has made it clear that they favor “private stablecoin issuance rather than official CBDC issuance.” With stablecoins being just as programmable and surveillable as CBDCs, and some stablecoin issuers like Tether already allied with U.S. intelligence and security agencies, the current stablecoin bill is poised to pave the way for the U.S.’ de facto CBDC and to ensure that Wall Street and well-established titans of digital finance like PayPal have the advantage.

Given the above, Kirsten Gillibrand’s involvement in the bill makes sense. After starting her career as a law clerk in Albany, NY, Gillibrand worked at the global, white-shoe law firm Davis, Polk & Wardwell, whose alumni include current Fed chairman Jerome Powell, from 1991 to 2000. The firm, since its earliest years, has been closely connected to J.P. Morgan (now a major donor to Gillibrand’s campaigns) and Wall Street in general. One telling example of the role of the firm in Wall Street’s political machinations occurred during the 2008 financial crisis, when the firm represented the public sector, i.e. the Treasury Department and Federal Reserve Bank of New York, as well as the Wall Street banks deemed to have played a role in creating the crisis, including Citigroup. Subsequently, the firm helped develop the government response to the crisis including by helping draft the relatively toothless Dodd-Frank Act which, over a decade after its passage, has done next to nothing to rein in the “too big to fail” banks or prevent the government’s “privatize the gains, socialize the losses” policy with respect to bank failures. Davis, Polk & Wardwell continues to give heavily to Gillibrand’s political war chest as does another law firm where she used to work, Boies, Schiller & Flexner.

While Wall Street banks like J.P. Morgan and Wall Street law firms like Sullivan & Cromwell donate heavily to Gillibrand, she has more recently taken on important players in the crypto industry as donors. The biggest of these is Coinbase, while other donors include Uniswap Labs. Another important donor is Fred Wilson’s Union Square Ventures, which has backed Coinbase as well as MondoDB. Andreessen Horowitz is another significant donor to Gillibrand, which has made many investments in the crypto space, including being the bulk of the funds behind Multicoin Capital, which is also backed by Union Square Ventures. Multicoin Capital itself donates significant sums to Gillibrand and is also a major donor to Cynthia Lummis. As will be discussed shortly, Mulitcoin Capital has significant ties to the stablecoin industry, particularly the stablecoin issuers most favored by the Gillibrand-Lummis bill.

While Gillibrand may have started off as a corporate lawyer, politics was always within her sights. Indeed, Kirsten Gillibrand’s political career is largely thanks to her very politically-connected family. Gillibrand’s father, Douglas Rutnick, a career lobbyist who has represented Morgan Stanley, Lockheed Martin and even the NXIVM sex cult, was a long-time “close associate” and friend of former New York Senator Alfonse D’Amato. Rutnick has been described as a “beneficiary” of the corrupt Democratic Party-run “machine” in New York’s capital Albany, with local papers noting that Rutnick “both served as Albany County public defender and ran a private law firm representing clients with business before the city” that was later accused of engaging in “questionable deals.” Gillibrand’s grandmother, Polly Noonan, was also intimately connected to the “Albany machine” as she was the long-time mistress of former Albany mayor Erastus Corning, a Democrat, and served as vice chair of New York’s Democratic party in the 1980s. That appointment was allegedly a favor granted by former New York governor Mario Cuomo, as Noonan had raised significant campaign funds for his gubernatorial bid prior to her appointment.

Gillibrand later claimed that it was her father’s ties to D’Amato that scored her a college internship at D’Amato’s office in Albany, NY when he was a serving Senator and marked her earliest foray into politics. Though she subsequently stated that she didn’t personally meet D’Amato until years later over “one lovely dinner together,” D’Amato – a scion of New York’s Republican party – was a central figure when it was announced that Gillibrand would inherit Hillary Clinton’s Senate seat after Clinton joined the Obama administration as Secretary of State in 2009.

D’Amato later claimed to have had nothing to do with Gillibrand’s appointment and Gillibrand later claimed that D’Amato did nothing to influence her politics, instead claiming that Andrew Cuomo and Hillary Clinton (both extremely corrupt) had helped secure her political future. She specifically identifies Clinton as a mentor. However, for anyone familiar with New York politics, where the back-door deal and close-knit power networks reign supreme, the reality is likely quite different from what they publicly professed.

D’Amato is noteworthy for a few reasons. First, he was slavish to criminal banks throughout his career, many of which funded his political campaigns. For instance, he was a major supporter of the repeal of Glass-Steagall, which allowed for the mergers that produced many of the “too big to fail” banks and later helped produce the 2008 financial crisis. D’Amato, while head of the Senate Banking Committee, had tried to speed up the passage of legislation that would repeal it. D’Amato had previously been bought out by Drexel Burnham Lambert, altering his stance on junk bond legislation that could have mitigated financial crises of the late 1980s, including that which led to Drexel’s bankruptcy in 1990. Gillibrand is backed by many of the same interests as J.P. Morgan – run by former Travelers Group executive Jamie Dimon – and Apollo Global Management – created by Drexel Burnham Lambert executives led by Drexel’s former head of M&A Leon Black – are among the current top donors to Gillibrand.

D’Amato is also important for his ties to organized crime networks that have become deeply embedded in U.S. politics and the American intelligence community, as discussed in the book One Nation Under Blackmail. For example, D’Amato was closely tied to both Roy Cohn and Cohn’s long-time law partner and right-hand man Tom Bolan, who was a close aide and advisor to D’Amato. Cohn was also reported to have been a major influence on D’Amato’s (unsuccessful) efforts to reduce sentences for a convicted mafia member as well as to push to re-evaluate murder charges against Gambino mafia boss Paul Castellano, a client of Cohn and Bolan’s law firm. As noted in One Nation Under Blackmail, Cohn – also widely recognized as Donald Trump’s mentor – was intimately connected to New York power networks as well as organized crime factions that worked with intelligence to blackmail prominent figures in government by hosting “parties” where targets were encouraged to have sex with minors.

Members of this faction have ties to the so-called “Mega Group” of billionaires, which is alleged to include figures like Ronald Lauder, heir to the Estee Lauder fortune, whose failed political career was backed by D’Amato. In addition, D’Amato’s later political campaigns intimately involved the Republican strategist Arthur Finkelstein, who is also credited with securing Benjamin Netanyahu’s successful win as Israel’s Prime Minister in 1999. Finkelstein’s role in the Netanyahu campaign had been brokered by Ronald Lauder, who had also donated heavily to Netanyahu that election cycle.

Doug Rutnick, Gillibrand’s father and D’Amato’s close friend, as noted earlier, was also a lobbyist for the NXIVM sex cult, which was closely associated with the Bronfman family. The Bronfmans have a long-standing association with organization crime and Charles Bronfman co-created the aforementioned “Mega Group” with Leslie Wexner, the main patron of Jeffrey Epstein, in 1991. Both the Bronfmans and Wexner greatly influence and are major donors to the Israel lobby organization AIPAC, Gillibrand’s top donor from 2019-2024.

According to reports, Rutnick was paid $25,000 a month by NXIVM in 2004. Though the group’s sex cult aspect was still unknown at the time, it had been derided as a “cult” before he was hired. However, Gillibrand’s associations with NXIVM, unfortunately for her, appear to go far beyond just her father, with her stepmother having also been wooed by the group. The NXIVM executive who courted her stepmother, Nancy Salzman, is also alleged to have sat with Gillibrand at a Hillary Clinton fundraiser in 2006. A key figure in NXIVM, Clare Bronfman, was a major donor to Clinton and also contributed $2,400 to Gillibrand’s 2010 campaign to maintain Clinton’s old Senate seat.

The founder of NXIVM, Keith Raniere, is the son of James Raniere, a New York-based advertiser who handled his agency’s account for Seagrams and knew Edgar Bronfman Sr. professionally during the 1970s. Keith Raniere, an avid fan of Ayn Rand, reportedly considered the population to be divided into two classes – parasites and producers – which helped shape the cult’s views and even the 12 commandments of the organization. The 11^th NXIVM commandment, according to reporting from The Observer, required all members to “pledge to ethically control as much of the money, wealth and resources of the world as possible” due to being “essential for the survival of humankind for these things to be controlled by successful, ethical people.” Despite most New Age organizations’ rejection of materialism, NXIVM understood the importance of money in the modern age. As Sara Bronfman explained in 2009, the year Bitcoin was launched, “in order to survive in a Western capitalist country, one needs to be able to exchange the products of their efforts for money that’s going to allow them to live.”

Lummis, like Gillibrand, is also funded by Multicoin Capital. In Lummis’ case, Multicoin Capital was her 4^th largest donor last campaign cycle and the biggest giver to her campaign from the crypto industry. Multicoin Capital is mainly backed by Andreessen Horowitz as well as other figures linked to Peter Thiel or Thiel protégés, such as David Sacks of the so-called “PayPal Mafia.” Multicoin investors such as Chris Dixon and Elad Gil have ties to companies created by Thiel protégé Palmer Luckey, Oculus VR (acquired by Facebook) and the defense contractor Anduril. Gil is also an investor in Coinbase in addition to Multicoin. Mulitcoin, along with several of its backers (Chris Dixon, Andreessen Horowitz and Union Square Ventures), invested a significant sum alongside Peter Thiel in the Brock Pierce-founded firm behind EOS, Block.one.

Multicoin’s portfolio includes Paxos (which is also backed by Thiel’s Mithril Capital) and Worldcoin (founded by Thiel protégé Sam Altman) as well as Algorand, Ethereum and the now defunct crypto exchange FTX. Multicoin was significantly affected by FTX’s collapse in late 2022, as it had around 10% of the assets for one of its three funds at FTX and also had significant exposure to FTX’s over leveraged token FTT. Unlimited Hangout previously reported on FTX’s close ties to the stablecoin Tether as well as FTX’s own ambitions to back a different dollar-pegged stablecoin via its affiliation with the highly suspect Moonstone Bank. Sam Bankman-Fried, prior to FTX’s implosion, had spoken of a “stablecoin war” where different players in the crypto industry were fighting for dominance over whose stablecoin would dominate in a post-regulatory environment. Bankman-Fried notably had played an outsized role in efforts that preceded those of Gillibrand and Lummis to regulate digital assets in the United States.

Multicoin itself is also very interested in and has invested in stablecoins. They have a particularly interesting relationship with Circle, which issues the USDC stablecoin. Circle Ventures is an investor in Multicoin, while Sei – which is backed by Multicoin – is an investor in Circle. According to Lummis, Circle is poised to benefit significantly more than its competitors from the stablecoin legislation she recently introduced with Kirsten Gillibrand.

Multicoin also led the Series A funding round for the Mountain Protocol, which produces USDM, a yield-bearing stablecoin backed entirely by short-term U.S. treasuries. Multicoin supports USDM in part because “USDM has the strongest regulatory moat today” compared to other dollar stablecoins and is “significantly ahead” when it comes to imminent stablecoin legislation. They write that they “are optimistic that USDM will become the market leader and scale to billions of people.” Coinbase Ventures also made a major investment in the Mountain Protocol, which is partnered not only with Coinbase itself but also the CIA-funded Chainalysis and the Israeli intelligence-linked Fireblocks. Within four months from its launch, USDM had become the largest Treasury-backed dollar stablecoin in the world.

Notably, yield-bearing stablecoins are absent from the Gillibrand-Lummis bill, even though such stablecoins can come with significant risk and often misstate the yield as gains rather than simply keeping up with monetary dilution. The lack of interest in addressing this type of stablecoin may be related to the fact that players much larger than Multicoin Capital, such as BlackRock, are launching their own yield-bearing stablecoins. BlackRock’s yield-bearing BUIDL token. Circle, which has a major alliance with BlackRock, offers conversion from BUIDL to its USDC stablecoin and USDM also only currently converts into USDC. In addition, Paxos, a Multicoin Capital and Thiel-backed stablecoin issuer partnered with PayPal, has also entered the playing field with their Lift Dollar (USDL) stablecoin.

In February 2024, both Treasury Secretary Yellen and Fed Chair Powell made remarks to Congress that the U.S. needs a legislative framework for stablecoins, stressing the importance they play in global dollar hegemony. Both Gillibrand and Lummis view their legislative efforts as largely aimed at ensuring dollar dominance. Lummis’ other crypto proposals, such as a recent introduction of bitcoin strategic reserve bill, are also aimed at “supercharging” the dollar. Lummis announced the strategic reserve proposal at Bitcoin 2024 in Nashville, commenting that “Establishing a strategic Bitcoin reserve would firmly secure the dollar’s position as the world’s reserve currency into the 21st century and ensure we remain the world leader in financial innovation.”

“Passing a regulatory framework for stablecoins is absolutely critical to maintaining the U.S. dollar’s dominance, promoting responsible innovation, protecting consumers and cracking down on money laundering and illicit finance,” according to Gillibrand. She also stated that:

“The bipartisan Lummis-Gillibrand Payment Stablecoin Act preserves the dual banking system and gives both federal and state agencies roles in chartering and enforcement. It protects consumers by mandating one-to-one reserves, prohibiting algorithmic stablecoins, and requiring stablecoin issuers to comply with U.S. anti-money laundering and sanctions rules. To draft the strongest bill possible, our offices worked closely with the relevant federal and state agencies and I’m confident this legislation can earn the necessary support in the Senate and the House.”

In April, Lummis and Gillibrand introduced the Payment Stablecoin Act of 2024. Gillibrand referred to it as a “landmark bipartisan legislation that creates a clear regulatory framework for payment stablecoins that will protect consumers, enable innovation, and promote U.S. dollar dominance while preserving the dual banking system.” The bill itself would also allow stablecoins to be “issued by non-depository trust companies (nonbanks) when the nominal value of all its tokens is under $10 billion.” The text itself states that stablecoin issuers with a market cap above $10 billion would be required to be “a depository institution authorized as a national payment stablecoin issuer.”

According to reporting from Forbes, companies such as Circle or Paxos would “have two options to be able to continue to issue stablecoins” if this bill was to become law by “either a state nonbank pathway” or as “a depository institution at the federal or state level that becomes a national payment stablecoin provider.” Importantly, the bill expressly prohibits “any other form of stablecoin issuance” beyond being backed by 1:1 reserves of dollar denominated assets, including algorithmic payment stablecoins such as the failed TerraUSD, as discussed in The Chain of Consensus. The bill also contains an “extraterritorial clause” which means that, if codified into law, even companies operating outside the U.S., such as Tether, would be required to abide by the legislation simply due to dealing with U.S. dollar tokens.

“In order to meet the growing demand for our ever-evolving financial industry, we need to craft legislation that strikes the careful balance of establishing a clear and workable framework for stablecoins while protecting consumers,” explained Lummis. “Together, Senator Gillibrand and I worked to preserve our dual banking system and install guardrails that protect consumers and prevent illicit finance while ensuring we don’t derail innovation. Passing this bipartisan solution is critical to maintaining the U.S. dollar’s dominance and making certain the U.S. remains the world leader in financial innovation.”

The content of the bill was advised via “multiple rounds of technical assistance” from representatives of the Board of Governors of the Federal Reserve System, Department of the Treasury, the National Economic Council, the New York Department of Financial Services, Wyoming Division of Banking and the Federal Deposit Insurance Corporation. While developing the landmark bill, both Lummis and Gillibrand “worked closely” with “key industry lobbies and trade associations,” publishing six pages of statements from entities including the Digital Chamber of Commerce, the Association for Digital Asset Markets, the Blockchain Association, Fireblocks, Multicoin Capital, the Crypto Council for Innovation, Kraken, Coinbase, and even FTX’s SBF, among others.

Included in this collection of statements was a quote from J. Christopher Giancarlo – the former Chairman of the CFTC, current board member of Paxos and The Digital Chamber of Commerce, and co-founder of the Digital Dollar Foundation – which stated:

“The Responsible Financial Innovation Act is what our country needs at this moment – a thoughtful, comprehensive approach to regulation that recognizes the potential of digital assets to drive American competitiveness on the global stage. The bill provides a common-sense path for digital asset exchanges to register with the CFTC and balances consumer protection and innovation. I look forward to working with Sen. Lummis and Sen. Gillibrand to ensure we have legal clarity for digital assets soon.”

Preserving The Dual Banking System: The Private-Public Partnership

The preface to the 2008 edition of Who Controls The Internet? by Jack Goldsmith and Tim Wu notes the pivot within the “net neutrality” movement. They note that, during the 1990s, the core belief was that government censorship of the internet was impossible, while the 2000s were spent lobbying the government to uphold and protect free speech on the web from threats emanating from internet service providers and adversarial foreign governments. The parallels to the cryptocurrency industry are astounding, complete with the formation of entirely new lobbying groups that perpetuate the notion that the adoption of the technology once framed as “kryptonite” to the nation state must now obtain “clarity” from legislators and regulators.

Two of the largest lobbying groups in the industry, Coin Center and The Digital Chamber of Commerce, have numerous connections to the parties covered thus far in The Chain series. Coin Center was previously advised by Xapo’s Wences Casares, in addition to both DCG’s Silbert and Paxos founder Charles Cascarilla being early funders. The original iteration of Coin Center’s advisory board featured Union Square Ventures’ Fred Wilson, Marc Andreeseen, World Economic Forum and Council of Foreign Relations member John Villasenor, and Jason Thomas, the creator and director of the FBI’s Internet Crime Complaint Center (IC3) and Associate Director of the Center for Intelligence and National Security Analysis (CINSA). In addition, Lightning Lab’s Elizabeth Stark is listed as Coin Center Fellow. Notable early Bitcoiners Balaji Srinivasan and Jeff Garzik were also listed on the founding Board of Directors, with Srinivasan also being credited as a co-founder of Coin Center.

The Digital Chamber of Commerce was founded by CEO Perianne Boring, a former television anchor and “legislative analyst in the U.S. House of Representatives.” The current Board of Advisors boasts heavy U.S. regulatory stalwarts; including former SEC Chair Paul Atkins; former CFTC Chair J. Christopher Giancarlo; the godson of David Rockefeller and former Richard Nixon speech writer, George Gilder; former J.P Morgan executive and creator of the credit default swap, Blythe Masters; the DCG’s Rumi Morales; former Trump White House Chief of Staff Mick Mulvaney; and DRW and DRW Cumberland founder Don Wilson, among others.

Giancarlo, lovingly referred to by some as “CryptoDad,” has served on numerous boards related to the blockchain industry, including BlockFi, Paxos, and PolyMarket, among others. He previously had been appointed by President Obama to the CFTC in 2013, and was eventually made its chair by President Trump in 2017. Giancarlo also was appointed a Director of the Board Risk Committee for Nomura Holdings, in addition to his stint on the board at the American Financial Exchange (AFX). The AFX was founded by Dr. Richard Sandor in order to create new lending rate benchmarks in lieu of LIBOR (London Inter-Bank Offered Rate), referred to as AMERIBOR.

Richard Sandor is credited with inventing financial derivatives in the 1970s and, during the 1980s, he was an executive at the scandal-ridden bank known for its role in the junk bond scandal and S&L crisis, Drexel Burnham Lambert. Shortly after Drexel’s implosion due to its financial criminality, Sandor was tapped by the Bush administration to develop a market-based “solution” for the acid rain crisis, resulting in sulfur emissions trading that was pioneered by groups like Howard Lutnick’s Cantor Fitzgerald. Shortly after the success of the sulfur emissions trading scheme, Sandor was sought out by Maurice Strong, a Rockefeller crony who served as founding director of the UN Environmental Programme and who was later fled to China to avoid prosecution for the egregious mishandling of UN funds in what is remembered as the oil-for-food scandal. Strong tasked Sandor with developing another market-based “solution” to carbon dioxide emissions in order to help implement Agenda 21, the pre-cursor to today’s “sustainable” development goals or SDGs. Sandor, with input from Strong, spent the next few years developing what is now known as the cap and trade system and has since become an advocate for creating similar markets for access to clean water and air.

Upon his announcement of joining Sandor’s AFX, Giancarlo stated: “Dr. Richard Sandor is one of the true visionary developers of new financial products. He has done it again with AMERIBOR and AMERIBOR Futures, recognizing that LIBOR will not be replaced with a singular benchmark, but with several. AMERIBOR is aptly designed to serve the particular need of America’s regional and community banks for an unsecured lending rate that is transparent, hedge-able and IOSCO compatible.”

PolyMarket, a prediction market that has come under scrutiny recently for facilitating alleged whale manipulation of their 2024 Trump/Harris election bet, announced the addition of Giancarlo as Chair of its board in May 2022 shortly after settling with the CFTC for $1.4 million. In May 2024, PolyMarket’s Series B founding round was led by Thiel’s Founders Fund, in addition to Ethereum founder and 2014 Thiel Fellow, Vitalik Buterin, among others. Upon the raise, PolyMarket also brought on former President of Cantor Fitzgerald’s Cantor Exchange, Richard Jaycobs, as the Head of Market Expansion, with reporting from Yahoo! claiming he will work “closely” with Giancarlo.

Three months after Giancarlo was appointed to the CFTC, in November 2013, the CFTC charged Donald R. Wilson and his company DRW Investments with price manipulation of interest rate swaps futures contracts, which “allegedly affected the prices of over 1,000 futures contracts,” according to the complaint. However, in December 2018, the CFTC lost their case against Wilson, having their compliant dismissed by Manhattan Circuit Judge, Richard Sullivan. Upon the ruling, according to reporting from Reuters, Giancarlo stated that “the regulator was considering its next steps,” but would “continue pursuing market manipulation cases, including at trial.” Judge Sullivan, a former counsel for Marsh & McLennan, was nominated by President Trump to the U.S. Court of Appeals for the Second Circuit in May 2018, and was confirmed by the Senate in October 2018, just two months before the ruling. On February 27, 2019, the CFTC announced they would not appeal the dismissal from Sullivan. “[A]fter careful consideration of the issues, as well as discussions with agency staff and Commissioners, Chairman Giancarlo has decided that the agency will not appeal the district court’s decision in CFTC v. Wilson et al.,” according to CFTC Director of Public Affairs, Erica Elliott Richardson.

Exactly one week later, on March 6, the Chamber of Digital Commerce announced the addition of Wilson to its advisory board, in addition to seven new companies joining their executive committee, including Block.one, DRW’s Cumberland, MakerDao and TrustToken, the issuer of the stablecoin TrueUSD. Upon his appointment, Wilson stated that “as a member of the Chamber of Digital Commerce, we [DRW’s Cumberland] look forward to engaging the policy community around the importance and potential of these technologies and helping this emerging market mature.” Six months later, in September 2019, Giancarlo was also appointed to the Board of Advisors for the Chamber of Digital Commerce.

Giancarlo had previously been the U.S. legal counsel to Fenics Software, an online U.S. Treasury market formed by Cantor Fitzgerald subsidiary BGC after selling their eSpeed product to Nasdaq. BGC is led by CEO and Chairman of the Board, Howard Lutnick, who now co-chairs the Trump transition team. In July 2022, BGC facilitated “the first ever intermediated block trade of CME Group Bitcoin options contracts in Asia” between Wilson’s Cumberland DRW and Goldman Sachs. Upon the settlement, Paul Kremsky, the Global Head of Business Development for Cumberland, stated that “Since Cumberland DRW first established an OTC cryptocurrency desk in 2014, the goal has always been to help usher institutions into the digital assets space.” Kremsky also added that “BGC will be a key partner in opening the growing asset class to a broader group of banks, funds, and investors, and Cumberland is extremely excited to work with them as a liquidity provider.”

Cumberland’s partnership with Tether (USDT) custodian Cantor Fitzgerald should be unsurprising, given that Cumberland is the second largest Tether customer, only behind FTX’s Alameda Research arm. Cumberland was considered an “incredibly important market maker on Binance” according to reporting from Protos, with approximately 79% of all USDT issued to Cumberland being sent directly to the world’s largest crypto exchange. Cumberland had also worked with Silbert’s Genesis lender, as was noted in a Tweet from Cumberland’s social media account. Cumberland is also “a very active participant” with other stablecoin providers, including Circle’s USDC and Binance’s BUSD (issued by Paxos), in addition to sending USDT to Coinbase, FTX, BitFinex and Huobi, among others.

Cumberland also participated in the 2021 President’s Working Group in their discussions on stablecoins, providing five recommendations to the administration, including giving “oversight authority to established banking regulators.” Cumberland also made clear the surveillance potential of digital dollars on blockchains, stating “stablecoins enable funds to be transferred 24/7, in real-time, globally, and with traceability,” while explaining that “existing banking solutions are unable to offer the same capabilities.” Both Coin Center and the Digital Chamber of Commerce offered similar comments regarding the future regulation of stablecoins. Interestingly, the Google Analytics ID for the Digital Chamber of Commerce’s website is reportedly linked to two of Tether co-founder Brock Pierce’s former companies, including Noble Bank and Blockchain Capital.

In August 2023, Coin Center referred to The Clarity for Stablecoins Act as one of “three good crypto bills” which “incorporates our guidance that stablecoins comprised purely of software not be subject to covered by regulation.” Coin Center would later push back on the Stablecoins Act provision for a two year moratorium on algorithmic stablecoins, citing “First and Fourth Amendment concerns” within the clause that states it is “unlawful for any person to engage in the business of issuing, creating, or originating an algorithmic payment stablecoin.” However, they would later backpedal and call this approach “not unreasonable” due to it being “not an outright permanent ban, but a two-year moratorium.” “It only prohibits future activity and does not affect existing projects,” the group explained, and “it does not prohibit speech, only the issuance of tokens that the ‘originator has represented will be converted, redeemed, or repurchased for a fixed amount of monetary value’.”

In October 2024, the Digital Chamber of Commerce (DCC) commented on the “Senate version” of the Clarity for Payment Stablecoins Act, remarking that “the absence of a clear regulatory framework has held back its full potential.” Cody Carbone, the President of the DCC added that “Stablecoin regulation is no longer just an option – it’s a necessity that’s been overdue for too long.” Previously, in April 2023, the group had made general comments to the House Committee on Financial Services, articulating that “We believe clear, consistent legal standards for stablecoins are critical to the success of the digital asset and Web3 industries globally, preservation of U.S. primacy in development and innovation, and for U.S. national security by upholding and extending the dollar’s world reserve currency standing.”

The Digital Chamber has since expanded on this concept of dollar hegemony via stablecoins in a section titled “Stablecoins will preserve the U.S. dollar as the worlds reserve currency”:

“A federally regulated stablecoin regime that requires backing by cash and cash equivalents like U.S. treasury notes does not infringe on government’s issuing authority, it extends the use of the dollar. As digital assets pegged to a stable value, such as the U.S. dollar, stablecoins offer a unique combination of stability and accessibility, allowing for seamless cross-border transactions while minimizing the risks associated with volatility. This can help maintain global confidence in the U.S. dollar and ensure its continued dominance in international trade and finance.

Additionally, the widespread adoption of stablecoins can foster financial inclusion, bringing the benefits of digital currency to unbanked and underbanked populations around the world. By promoting the use of stablecoins, the U.S. can leverage the advantages of digital currencies to extend the reach and influence of the dollar in the rapidly evolving global financial landscape.”

This idea of stablecoins helping retain U.S. dollar hegemony was echoed by President Trump in his keynote at Bitcoin 2024. As articulated in previous reporting on Unlimited Hangout, Trump’s speech included intentions to “create a framework to enable the safe, responsible expansion of stablecoins […] allowing us to extend the dominance of the U.S. dollar to new frontiers all around the world.” Trump even went so far as to say that “those who say that Bitcoin is a threat to the dollar have the story exactly backwards” and that “Bitcoin is not threatening the dollar.” Of note is Trump’s comment that “there will never be a CBDC while I’m President of the United States,” despite his intention to use dollar-denominated stablecoins to spread the U.S.’s dominance across the globe.

This concept can also be found in a May 2024 post by Morgan Beller, the previously mentioned co-founder of the Libra project, titled “Stablecoins Are Defense Tech.” Beller’s missive states in the first paragraph that “One of my personal motivations behind Libra was national defense.” The piece also stated the following:

“Stablecoins are defense tech…The basic idea is that the future of money will be more digital than it is physical. And stablecoins – in this case, cryptocurrency pegged to a stable currency like the USD – are the best tool we have for digitizing the dollar. If we don’t digitize the dollar, we risk losing its position at the center of the financial world. If that happens, we will lose a critical pillar of US stability and leadership that most people are taking for granted right now…

If you are a stablecoin founder and you haven’t been thinking of yourself as a defense tech company, think again. And if you are a regulator who has been sleeping on stablecoins and the role they will play in the hegemony of the dollar, wake up… If we want to create stable infrastructure – for finance and even democracy (bear with me) – then we need to move quickly…

Being the world’s reserve currency is not a right. It is a privilege. It comes with some financial perks, like never having to go through an exchange process for trade, or the fact that we borrow money at lower interest rates (and, in a different light, it makes it easier for us to impose sanctions on other countries).

But the real power is security. If the dollar were to collapse it would have huge repercussions throughout the world economy. Much of the world’s monetary system is held together by the fact that the US is stable. Which means we are less likely to experience targeted attacks, financial warfare, hostile takeover…or worse…

From our American POV, the USD not as much a weapon as it is a shield…It has always confounded me that there are still US regulators that don’t see safe and secure stablecoin projects as our (benign) trojan horses for continued dominance of the US dollar. If you want to proliferate your currency through many stable assets, across many secure exchanges, what better option do you have than a stablecoin? It’s also free marketing for USD – an immediate way to give access to those dollars to millions more people around the world who want them through a decentralized network…

A diverse stablecoin ecosystem is exactly what we want to see. Not just for consumers, but for national security. Many projects pegged to the USD, means the dollar is way harder to overtake…

We have a network of stablecoin founders throughout the US who can step in to solve this problem for us, if we provide them with the resources and support they need. The crypto-obsessed out there like to focus on individual coin market caps, but come on guys: this is a team sport.

Technically and organizationally, stablecoins will allow the dollar to digitally proliferate…This is what I hope all stablecoin founders will come to realize, if you don’t know it already. Your work is a matter of national defense, and even a matter of democracy.”

This sentiment seems widely shared, with many key figures in both the public and private sectors seeing the future of the dollar in privately-issued dollar stablecoins in lieu of a U.S. issued central bank digital currency so that it perpetuates the “dual banking system,” allowing the government to service its budget and debt via the selling of Treasuries to private banks and companies, such as stablecoin issuers. It should be of little surprise that many of the companies poised to capture this trillion dollar industry via king-making regulation, including many of the firms covered thus far in The Chain series, have numerous connections to the first major player in online settlement, PayPal.

Regulatory Approval: The King’s New Market

One of Libra’s other co-founders, Christian Catalini, recently co-authored a piece for Harvard Business Review in August 2024 titled “The Race to Dominate Stablecoins.” The article opens with “Stablecoins, a novel form of interoperable and programmable money, have the potential to rewire the global financial system.” Catalini, along with his co-author Jane Wu, expresses the thesis that stablecoins are poised to displace legacy payment networks, with the “promise to change the balance of power in these industries,” and thus “the companies that control the stablecoin market will wield substantial influence over the future of money.” The piece furthers that the concept of “The Stablecoin War” has come to a head, and the winner(s) of this conflict will become dominating figures in the new global financial system, making parallels to other technology platform wars such as HD-DVD vs. Blu-Ray, VHS vs. Betamax, or even Macintosh vs. PC. Unsurprisingly, the piece, excerpted below, paints an outcome favorable to PayPal’s PYUSD issued by Paxos vs. the incumbents, Tether and Circle:

“The conclusion of a platform war is always the same: A dominant design emerges, everyone switches over, and the conflict is done…But while the blockchains war might be over, the one for stablecoin dominance is just beginning…

Stopping the consortium behind Libra only bought incumbents time, and things are heating up again… Regulation gives incumbents a chance to leverage their distribution and lobbying to slow things down to a halt while building a counteroffensive. This is what killed Libra, and others may face the same fate soon.

Stablecoins present a second chance at reforming the financial system. But whether they will be able to do so depends on the stablecoin wars — and whether regulators tip the scales in favor or against innovation…Irrespective of the unpredictable level of regulatory interference in the stablecoin wars, the most important question is whether we will end with one or two global players leading, or with a swarm of commoditized issuers.

For both Tether and Circle, we believe the strategy is simple: Adapt to tighter compliance and consumer protection standards without losing the ability to monetize the stablecoin ecosystem. This is a delicate balancing act, as stricter regulation will inevitably limit how issuers create and capture value…

Paxos is betting on a world with many stablecoins. By positioning itself as a stablecoin infrastructure provider, Paxos helps others issue branded stablecoins. This has been so effective that when PayPal decided to enter crypto, it partnered with Paxos. While PayPal’s PYUSD only has $350 million in circulation, market cap is the wrong metric if you care about payments rather than crypto trading and decentralized finance (DeFi). For stablecoins that want to compete with the card companies, total payments volume (TPV) will be a better metric, and that’s where PayPal could rapidly overtake USDC thanks to its existing merchant business…

So while Tether and Circle have dominated the crypto era, graduating from this niche, unregulated market to billions of consumers and businesses is a fundamentally different game.”

Catalini left Meta after the Libra project was shuttered, only to shortly join former PayPal President David Marcus at LightSpark. LightSpark later partnered with Xapo, Ripio, and Coinbase in order to help facilitate their Lightning Network builds, including launching their Universal Money Address standard with Xapo and Ripio. Both of which boast ties to the Endeavor Argentina network, with Endeavor itself largely funded by Pierre Omidyar, the previous owner of PayPal who remains its largest shareholder. LightSpark’s roster is chock full of former PayPal employees, including Marcus, VP of Product Nicolas Cabrera, CMO Christina Smedley, Operating Partner Tomer Barel, in addition to former Libra team members, including Catalini, Head of Engineering Vincent Durmont, CTO Kevin Hurley, CDO Geoff Teehan, and VP of Finance, Mary Kauffman. LightSpark was funded by investments from Mickey Malta’s Ribbit Capital, Paradigm, a16z crypto, Kushner’s Thrive Capital, Beller’s NFX, and Coatue, among others.

In October 2024, LightSpark announced their own Bitcon Layer 2 platform Spark, which enables native issuance of stablecoins, while also allowing the transfer of stablecoins issued by other means, including Lighting Lab’s Taproot Assets. LightSpark also announced an upgrade to their UMA product, UMA Extend, which integrates Bitcoin’s Lightning Network directly with traditional banking systems for 44 fiat currencies in over 100 countries. VP of Product Nicolas Cabrera stated that “this is the first time connecting the Lightning Network to traditional banking routes and bank systems.” Marcus himself stated that “At the end of the day, if you build a more efficient network that enables global money movements to move faster, cheaper, in real time 24/7 with no blackout dates, then that’s where money is going to flow and the financial system and the ecosystem players are just going to need to adapt to that.” Due to Diem’s previous partnership with Paxos, the issuer of PYUSD, and Marcus’ relationship with PayPal, it seems likely that LightSpark could eventually add support for PayPal’s stablecoin.

Paxos’ Head of Strategy, Walter Hessert, expressed positive sentiments on PYUSD’s adoption in a conversation with Bitcoin Magazine in October 2023, stating “PYUSD certainly has an opportunity to be one of the largest, if not the largest stablecoin in the market over the coming years.” Hessert also stated that “we’re going to be in a market that is trillions of dollars of stablecoins, which are privately issued and highly regulated,” whereas “PayPal has set the standard for regulatory oversight.” In a slight to these incumbent issuers, Hessert asserted that “the USDT or USDC models of regulation,” or “lighter forms of oversight” are not “going to be sufficient anymore, and “that PayPal has a really, really great opportunity to take a big share of this next wave of growth.”

This regulation, which Hessert claims will dictate the future of stablecoins, is set to come to a head during the imminent 2024 Presidential election. Trump’s pick for Vice President, J.D. Vance, who has numerous connections to Peter Thiel and the extended PayPal mafia, was formerly a principal at Thiel’s Mithril Capital, a major investor in Paxos. Leading Trump’s Transition Team is Howard Lutnick, the CEO of Cantor Fitzgerald which custodies Tether’s Treasuries, who has recently come under scrutiny for “improperly mixing his business interested with his duties standing up a potential administration.” According to reporting from Politico, Lutnick took meetings on Capitol Hill under the guise of transition team matters, then “allegedly us[ed] the opportunity to talk about matters impacting his investment firm, Cantor Fitzgerald,” which included “high-stakes regulatory matters involving its cryptocurrency business.” In regards to the conflict of interest, Richard Painter, a White House ethics lawyer who served in President George W. Bush’s administration, articulated “to have a guy who is in the crypto industry picking financial regulators, I think, is an invitation for trouble.”

In addition, another member of the Trump transition team, former Presidential candidate Vivek Ramaswamy, who dropped out to campaign on behalf of Trump and whose top aide joined the Trump campaign in November 2023, founded Strive Asset Management in 2022, and was promptly funded by Lutnick and Palantir’s Joe Lonsdale, after receiving seed funding from Peter Thiel.

In September 2024, Trump announced plans to launch his own cryptocurrency, known as World Liberty Financial, which pegged Rich Teo – the co-founder of Paxos, as noted in The Chain of Issuance – to serve as their stablecoin lead. World Liberty Financial’s mission, according to a Tweet, is to “make crypto and America great again by driving the mass adoption of stablecoins and decentralized finance.” Another tweet from World Liberty Financial reads, “By spreading U.S.-pegged stablecoins around the world, we ensure that the U.S. dollar’s dominance continues, securing America’s financial leadership and influence on the global stage.”

In August 2024, Anchorage Digital announced a partnership with PayPal in which they would offer stablecoin rewards for holders of PYUSD. Anchorage Digital, as noted previously in The Chain series, was the first and only digital asset bank to receive a Federal Charter charter from the OCC in January 2021, which was given to Anchorage in the final days of the Trump administration. The head of the OCC at the time, Brian Brooks, a former co-worker at OneWest Bank with Secretary Mnuchin and the former Chief Legal Officer of Coinbase, left the public sector to join Binance’s U.S. exchange for three months before joining Bitcoin miner Bitfury . Anchorage has been funded by Visa, BlackRock, Ron Conway’s SV Angel, PayPal Ventures, Blockchain Capital, Alameda Research, Goldman Sachs, Andreessen Horowitz, Khosla Ventures, Naval Ravikant and Leon Black’s Apollo. In October 2024, Anchorage investor PayPal Ventures announced the future use of PYUSD as a funding mechanism for all future investments. Anchorage’s board features Blockchain Capital co-founder, P. Bart Stephens, in addition to a16z’s Chris Dixon, and Paradigm’s Kate Biber. It is also currently advised by former U.S. Fed Governor Kevin Warsh, former Soros Fund manager Stanley Druckenmiller, and PayPal co-founder Max Levchin.

While the initial promise of Bitcoin and cryptocurrency was to minimize government control over the issuance of money, the killer use case of blockchain technology thus far has been the tokenization of dollars backed by U.S. Treasuries. This premise, albeit with the added public and immutable ledger, is shockingly similar to the current “dual banking system” referenced by Gillibrand and Lummis. Capital creation remains the ultimate public-private partnership, in which the Treasury creates bonds, the Fed sets the rate of yield over set durations, and private banks use these securities to back dollars in checking accounts.

In a stablecoin economy – at least one in which non-Treasury-backed, algorithmic alternatives are neutered by public sector regulation penned in response to private sector crimes – the premise is precisely the same. The main differences, unfortunately, are due to the nature of public blockchains, in which every and all transactions are published transparently in a novel database structure allowing total observation of financial data, including account balances, payment size and denominations, and even the account addresses of senders and receivers. This is seemingly a significant disadvantage from legacy payment rails, which solely provides financial information to the select banking institutions involved in settling the payment. Government regulation generally restricts this type of data from being sold or made available to the public en masse, outside of the case of hacks stemming from irresponsible data protections.

The financial information to be gleaned from a public blockchain economy has created a scenario in which no longer do information brokers or intelligence agencies need warrants or regulatory approval to track and trace these digital payments. As Max Levchin put it, “There is no such thing as technology that is strictly for good.” This sentiment was articulated by the former Acting Director of the CIA, Michael Morell, who called the technology behind Bitcoin a “boon for surveillance.” Morell wrote a piece titled “An Analysis of Bitcoin’s Use in Illicit Finance” in which he furthered that “blockchain technology is a powerful but underutilized forensic tool for governments to identify illicit activity and bring criminals to justice,” and that “Put simply, blockchain analysis is a highly effective crime fighting and intelligence gathering tool.”

The piece sets the premise that governments should not fight this technology, but rather embrace it as means to combat illicit finance. Within the report, a current CFTC official stated that it “is easier for law enforcement to trace illicit activity using Bitcoin than it is to trace cross-border illegal activity using traditional banking transactions, and far easier than cash transactions.” Another unnamed expert told the authors that “the chance of catching illicit actors” is “magnitudes greater” using “blockchain than in the traditional banking sector,” while another “went so far as to say” that “if all criminals used blockchain, we could wipe out illicit financial activity.” Another expert drove this point home, with the report stating that “the biggest threat involving cryptocurrencies is not illicit finance but rather that governments do not yet fully understand the power of blockchain as a tool for law enforcement and intelligence agencies.”

This sentiment was echoed by Tether founder Brock Pierce in a conversation at Idealab, the California technology incubator known for being PayPal’s first institutional investor, as covered in The Chain of Issuance:

“Bitcoin is not really anonymous. Imagine if I had a dollar bill and passed it to you and then that bill was signed that this transaction was conducted and that bill got passed around. Every transaction that occurs with a Bitcoin is permanently recorded, maybe not with my identity directly associated with it, but in the same way that you thought you would post things on the internet 5 or 10 years ago, and that might not ever be tracked back to you, at some point pretty much every Bitcoin transaction is going to be connected back to an individual. So anonymity is actually not its real use case.”

Peter Thiel himself has also perpetuated this idea, stating that “people in the FBI tell me that they’d much rather have criminals use Bitcoin than 100 dollar bills.” Thiel’s CIA-linked Palantir even announced in 2021 that they were considering adding Bitcoin to its balance sheet, and that it currently accepts Bitcoin as payment for its products and services. While banks like J.P. Morgan and Citi are widely considered to be the forefathers of information banking, PayPal’s Max Levchin insinuates that it was in fact PayPal that pioneered this data-driven behavioral analysis which, when paired with its anti-fraud algorithim “Igor” – the precursor to Thiel’s Palantir– created a formidable private-sector intelligence broker:

“At PayPal, which I co-founded many years ago and was a CTO for the first four years – right after we got acquired by eBay, I left – we sort of pioneered that concept, I would say, by capturing human behavioral data in the transactional processing, that we’ve seen millions of those per day, to gain such deep understanding of what people would do that we were able to predict their intentions sometimes before they knew their own intentions”

According to Thiel, PayPal was the first company to file in the U.S. for a public offering after the events of 9/11. The downstream effects of that day would have large implications for the world at large, and the reactionary regulations the U.S. put in place would both limit capabilities of new ventures, while king-making incumbents such as PayPal. As Thiel himself stated, “I actually do not know if a company like PayPal could have been started even two, three years later.” He would further articulate this concept in an interview with The Rubin Report:

“In the aftermath of 9/11, we got the Patriot Act in the U.S and that attached, you know, much more regulatory scrutiny to financial transactions, to payments, that know-your-customer rules became much, much trickier. And so I do think that there’s a weird way in which there was an opening to start a business like PayPal in 1999, 2000, [but] even three years later, I think it might not have been possible.”

While Thiel claims to be a libertarian – despite being a government contractor and an FBI informant, among other hypocrisies – his first real success as a business, not to mention his first major windfall of cash, was cemented in its near-monopoly in no small part due to government regulation after a major destructive event. Unfortunately, the parallels to the controlled demolition of FTX and Terra-LUNA to the mass casualty event of 9/11, at least in regards to inspiring king-making government regulation, are numerous. For starters, there were mass profits made by those equipped with insider knowledge informing their short positions, and further, the proliferation of government-endorsed technological answers to criminal activity has led to constitutional conflicts with massive impacts on the privacy of the country’s citizens, not to mention the world population at large, all under the guise of protecting people.

Thiel overtly expressed the need for redistributing the compromises between security and freedom in his essay “The Straussian Moment,” in which he wrote that “the brute facts of September 11 demand a reexamination of the foundations of modern politics,” further stating:

“The twenty-first century started with a bang on September 11, 2001. In those shocking hours, the entire political and military framework of the nineteenth and twentieth centuries, and indeed of the modern age, with its emphasis on deterrent armies, rational nation-states, public debates, and international diplomacy, was called into question.

For how could mere talking or even great force deter a handful of crazy, determined, and suicidal persons who seemingly operated outside of all the norms of the liberal West? And what needed now to be done, given that technology had advanced to a point where a tiny number of people could inflict unprecedented levels of damage and death?

The awareness of the West’s vulnerability called for a new compromise, and this new compromise inexorably demanded more security at the expense of less freedom. On the narrow level of public policy, there needed to be more x-ray machines at airports; more security guards on airplanes; more identification cards and invasions of privacy; and fewer rights for some of the accused. Overnight, the fundamentalist civil rights mania of the American Civil Liberties Union (ACLU), which spoke in the language of inviolable individual rights, was rendered an unviable anachronism.

Even as the debate over freedom and security gathered strength, whatever military force could be mustered was used to track down those responsible for the violence of September 11… On the broader level of international cooperation and development, September 11 called for wholly different arrangements. The issue of unilateralism, and of the institutions designed to provide a cover for unilateralism, could be raised publicly by serious people for the first time since 1945.”

Serious People: Satoshi Nakamoto, Max Levchin, and Peter Thiel

One of these “serious people” would be the anonymous creator of Bitcoin, Satoshi Nakamoto, who understood that “technology had advanced to a point where a tiny number of people” could fundamentally change the world. Despite once claiming that “if we knew who it was, the government would arrest him,” Thiel believed he had actually met Satoshi on a beach in Anguilla during a financial cryptography conference a year before the events of 9/11:

“My sort of theory on Satoshi’s identity was that Satoshi was on that beach in Anguilla… I met them on the beach in Anguilla in February of 2000. We were beginning the revolution against the central banks on the beach in Anguilla. We were going to make PayPal interoperable with E-Gold and blow up all the central banks… Bitcoin was the answer to E-Gold, and Satoshi learned that you had to be anonymous and you had to not have a company. Even a company, even a corporate form, was too governmentally linked.”

Thiel had previously told the story of traveling to Anguilla with PayPal’s cryptographer and CTO, Max Levchin, in a 2004 discussion with Levchin at Stanford University:

Levchin: “We were not the first company in digital payments. In fact, a decade of digital payment attempts had just been capped off with a very spectacular flame out by a company called DigiCash. And literally a couple of nights before I met Peter, I went to the shutdown party of DigiCash which was on Stanford grounds. And it was a bankruptcy and it was a CEO brought in to just, you know, dispense with the employees and dispose of the intellectual property. It was really bad news. The whole cost of digital cash has been around for about 25 years, so certainly we were not the first ones. I think we were the first ones to compromise wisely on the notion of user interface being actually useful, as opposed to complicated, or just purely secure.”

Thiel: “There’s a three-way trade-off between privacy security and convenience and if you get any two of them 100% the third one you’ll be at 0% and that would be bad. I remember Max and I went to this financial crypto conference in Anguilla. We have all these people to try and develop new payment system, they have a conference on this, and in February of 2000, we went there and we decided, you know, all these people working on this for 10-15 years, and we announced we have figured out the formula for how to do payments online and how to actually create a new digital currency, and it is hard to to understate the degree of anger and resentment that the people felt.”

Levchin: “So when Peter and I went there, I made a promise in February 1999 that I will come back and I’m gonna do something very obnoxious if PayPal is successful because I wanted to make a point that, you know, we have figured it out because people were really not very friendly… I actually gave a talk at Financial Crypto 2000 and I think Peter wasn’t in the audience because he slept through, but I forgave him later on. The talk was titled ‘No One Needs Anonymous Digital Cash’ and the whole point of the talk was really ‘Look, there’s this trade off.’ There’s privacy, security and convenience, and if you get the security perfectly and privacy perfectly, convenience is gonna go to hell, and you just have to deal with that and compromise. The talk was fairly academic, and I was really trying to make a point, and they sort of involved a lot of math. But I basically had two slides. The first slide had all of my math and all of my academic stuff in it, and a second slide, I had a dramatic pause and I said, ‘Look, if you don’t believe me, look at my slide.’ That’s a 250,000 users, which is what we had at the time. The largest number of users DigiCash has ever seen was, I think, 2000. So it was a very quiet moment in the audience, then people started to boo me offstage.”

In 1975, long before Levchin would explain how he and Thiel had “figured out the formula” for online payments and “how to actually create a new digital currency” at the same Anguilla conference Thiel speculated he had met Satoshi, Maksymilian Rafailovych Levchyn was born into a family of physicists in Soviet-era Ukraine. In 1991, Levchin and his family departed the Soviet Union under political asylum, boarding a PanAm flight in Moscow with only $700 to their name, before arriving in Chicago. As the story goes, before the wheels had touched ground in Illinois, the USSR had collapsed. “My family immigrated to the United States as refugees. I was a man without a country,” explained Levchin. “My red Soviet passport was a passport to no country. America offered us safety and opportunity.”

Levchin attended the University of Illinois at Urbana-Champaign, majoring in Computer Science alongside two future PayPal co-founders, Luke Nosek and Scott Banister. Levchin stated in 2013 that he “spent [his] entire college career reading up on distributed networking [and] distributed systems, which was all about bringing intelligence all the way to the edge.” Between his studies, Levchin also demonstrated his entrepreneurial spirit, founding SponsorNet New Media in 1994, NetMomentum Software in 1996, and NetMerdian Software in 1997. His alleged reasoning for continuing the trend of naming his companies with SN or NS as initials was simply because he wanted to retain the use of a logo featuring the letters. All of these companies would focus on early online advertising, with SponsorNet focusing on ad banners, while NetMomentum and NetMeridian would built out early “white-label classifieds for newspaper sites.” Both Nosek and Banister were involved in SponsorNet while still students, although the company was a failure.

Levchin graduated in 1997, and promptly headed to Silicon Valley – specifically a couch in Banister’s apartment in Palo Alto – where he would encounter the then-currency speculating Thiel, whose main venture at the time was Thiel Capital. Before PayPal, or X.com, or even Confinity, there was FieldLink, a 1998 technology startup founded by Levchin, Thiel and Nosek, which was focused on applying cryptography on handheld devices for enterprise use. “I was one of the first developers of the PDA… and I was like one day, everyone is gonna use these at work,” Levchin recalled telling Thiel. “What do you think they’re gonna do when the man is gonna try to read their documents, when their customers are gonna steal all their data? They’re gonna encrypt it. And I’m gonna invent all the crypto.”

But the community was small and the applications dreamed up by Levchin and his compatriots were early, leading him to describe FieldLink as “early Christians in the first century… waiting for the second coming.” In 1999, a year before the aforementioned Anguilla conference, Levchin appeared at the International Financial Cryptography Association conference to pitch the company’s – now known as Confinity – on the concept of “a cashless, all digital, PalmPilot-based money system.” The response was hardly enthusiastic, perhaps dimmed by the recent failure of DigiCash.

Despite the conference-goers sentiment of rejection, Confinity soon scrounged up significant investments from Nokia Ventures, Idealab, Deutsche Bank, and Goldman Sachs before the millennium’s close. In a widely publicized event now referred to as “Beaming At Buck’s,” the PayPal co-founders “beamed the capital [raised] for its first round between Palm Pilots,” arguably marking “the first time in history money was ever transferred electronically.”

Pete Buhl of Nokia Ventures, which had invested $4.5 million in Confinity, stood across from Thiel, both equipped with PalmPilots, and after positioning their infrared ports correctly, “beamed” the entirety of the Nokia-invested capital across the California restaurant. Levchin, who had spent many sleepless nights preparing for the 9AM event, made sure to express it was anything but a publicity stunt in a 2004 conversation with Thiel, stating: “And it was really for real…I kid you not…it was a real encrypted transaction.” Buck’s of Woodside, an aptly-named, Americana-decorated breakfast joint which sits between Stanford University and the VC breeding ground, Sand Hill Road, was owned by Jamis MacNiven, who has posed in photos that adorn the walls of Buck’s with prominent public figures like Yitzhak Rabin and George Bush. The event was both a technological and social success, leading to many features in papers, and effectively putting the-soon-to-be PayPal on the map. Or, at least, in investors’ Rolodexes:

“Three million dollars, Palm pilots, breakfast at Bucks, it was actually a technology story that sort of made sense and got written in a number of papers, number of press coverage.. And at that point on the investor side, people just started banging down the door and I remember the range from sort of the very respectable, sketchy, and the seemingly respectable but really sketchy..

I remember the classic example of the second type was about a month later, we installed this one thousand square foot office, we had about fifteen people working at the company in a thousand square foot office at University Avenue in Palo Alto and this delegation from Japan showed up, Six Japanese business suits and ties and “We would like to form a relationship with your company and we read about you in the newspaper and we like to invest.” Over the next three, four months, it was this iterative process.. We fly to Tokyo a few months later and one of our Japanese advisers told us, “Hikari Suchen, they’re a very aggressive company and many people of Japan do not like them.” And I thought, “That’s great! We want people who are aggressive and who will be able to move quickly.”

And two months later as we were ready to close another round, they called me up at midnight and said, told me, “I’ve been getting orders from Tokyo.. I must invest $20 million in your company.” And I said, “Well, I can’t really take any of your money right now but can we rest half a million…” It was just, it was really, really crazy.. Although, a few months later, we figured out that they were actually a front organization for organized crime in Japan.. And of course we’ve been warned very clearly by our Japanese adviser although the slight translation problem didn’t quite catch it…”

While the technology certainly worked, then-Confinity board member Reid Hoffman questioned its practicality outside of their PalmPilot-dense Silicon Valley bubble. According to Jimmy Soni’s The Founders, Hoffman pushed the company to utilize this technology via another medium, stating: “We are living in the heaven of PalmPilots, and we could walk into every single restaurant and go to each table and ask how many people have PalmPilots.” Allegedly, Hoffman postulated that “the answer was between zero and one per restaurant.” Leading Hoffman to determine that “your use case can only be used between zero and one times, per restaurant, per meal cycle! You’re hosed! It’s over on this idea.” And further more, what happened if a PayPal user forgot their PalmPilot at home? Levchin would quickly hack together a “backup” email service, allowing PDA-less users to still be able to send money electronically simply by using an email provider. While initially designed as a “throwaway demo” banished to the corner of PayPal.com, Levchin increasingly found himself “using the email service to test transaction functionality” due to its convenience over the hardware instance.

The future COO of PayPal, David Sacks, would later stress during his job interview that he would only join the company if they made the email service the main product offering, bringing up a few problems with the PDA approach: “One is that there are only five million Palm users, so unless you’re with somebody who also had a PalmPilot, the app is useless. And then there’s the other problem, even if you’re with somebody who’s got a PalmPilot, what would you use it for? Nobody could really come up with anything better than splitting dinner tabs.” The Primordial PayPal Mafia was, of course, directionally correct, and while PalmPilots were overtaken by smartphones by the end of the 2000s, today, email remains one of the most widely-used technologies in history.

Unfortunately for Levchin, the viral network growth of PayPal led to a plethora of fraud, as covered in The Chain of Issuance, and the majority of his time as CTO of PayPal was spent focused on anti-fraud efforts. This effort led to the creation of the Gausebeck-Levchin Test, used essentially as a reverse-Turing test – meaning the successful completion of the test would prove one is a human, and not a computer – and was the first commercial application of CAPTCHA, ultimately being instrumental in limiting fraud on their website. Within the constant fight to stop the bleeding of funds lost to fraudulent activity, Levchin collaborated heavily with government intelligence and law enforcement. He later stressed these relationships in a controversial conversation with Charlie Rose in 2013, stating “When we were working on security and anti-fraud measures at PayPal, we collaborated with every imaginable three and four-letter agency and those were some of the best, most productive relationships I’ve had as a business person.”

Levchin’s affinity for the intelligence community started far before PayPal’s founding, during his early days exploring cryptography, once stating “I was hooked [on cryptography], and even tried to apply to the NSA for an internship, but was promptly rebuffed because I was not (yet) a U.S. citizen.” A few weeks after his Charlie Rose appearance, Levchin appeared at TechCrunch’s Disrupt SF 2013 to clarify his statements, articulating:

“When I was a in college, I applied to the NSA. I couldn’t get accepted because I was not a citizen yet…I was a crypto nerd. I was very excited about applying cryptography for the good of the country that I literally just came to. [The NSA recruiter] said the one thing you should be very clear about [is that] not only will you get paid peanuts, you will also never achieve fame as a mathematician because you are not allowed to publish any result that you find as a mathematician under the employment of the NSA.”

During the 2019 SFELC Summit sponsored by Hoffman’s Greylock Partners – a firm with numerous ties to the CIA and the intelligence community, as described in The Chain of Custody – Levchin suggested that law enforcement was still reaching out to him for information regarding the aforementioned trip with Thiel to Anguilla. Levchin explained that in attendance at the Financial Cryptography conference “there were three types of people,” including “broke students like me,” “real cryptographers like the R and the S of the RSA” and “a bunch of guys in two-piece suits that spoke with really heavy Eastern European accents” asking for help with private payments. He would further reveal that “on occasion, I still get calls from investigators saying ‘Hey, did you meet this person 20 odd years ago at Anguilla?’” In the same spirit, in 2015, Levchin joined the advisory board at the Consumer Financial Protection Bureau, a “watchdog agency created by the Obama administration to police financial institutions.”

At the start of 2016, Levchin would announced the creation of Levchin Prize for Real-World Cryptography, stating in a LinkedIn post that “I hope that this prize encourages younger researchers – especially students – to think about how cryptographic principles can be applied to improve the many flawed systems of today.” The post concluded with the sentiment that “at a time when governments and corporations are scrambling to stem the rising tide of data breaches, cryptography has never been more important to the security of our economy and our personal privacy.” During the 2022 Levchin Prize Award Ceremony, the committee requested nominations for future prize winners, with the caveat that “we’re a bit bored of Satoshi getting nominated because who would we give it to?”

Levchin himself, in 2017, told CNBC that “It’s a brilliant mathematical idea, fantastic technology, interesting commodity to speculate on.” While unsure on Bitcoin itself – “I’m still trying to figure it out” – he expressed a firm belief in the underlying database structure itself, stating: “I think a form of a blockchain technology, bitcoin or otherwise will be essential and will not go away. Not only that, it will continue advancing and being used in many different industries from financial technology to medicine. But it’s not clear to me whether Bitcoin itself is the great long-term investment.” Alluding to the similar “digital gold” argument of his PayPal Mafia counterparts, Levchin claimed it was “TBD [to be determined] on whether it’s a currency or just a way to make money fast.”

Despite his public-facing ignorance on Bitcoin in 2017, in 2014, Levchin admitted to investing in a “friend’s startup that mines Bitcoin.” Presumably, this startup was Balaji Srinivasan’s 21e6, which raised $70 million in 2013 from Levchin’s compatriots, Peter Thiel and David Sacks, in addition to Marc Andreessen and Ben Horowitz. According to Nathaniel Popper’s Digital Gold, “the 21e6 investment was attractive in part because venture capital firms generally felt that they couldn’t buy Bitcoins directly. 21e6, on the other hand, offered to pay its investors back with Bitcoin dividends, allowing the firm to get Bitcoins without buying them outright.” Levchin would confirm this payment arrangement in the aforementioned 2014 interview, stating “they paid dividends in Bitcoin. I’ve never taken my dividend, but I believe they declared at least one. So, I actually have some Bitcoin to my name somewhere.”

In a 2014 conversation with Pando, Levchin expressed admiration for Bitcoin’s white paper, stating “The math behind the original paper, which I read it a many, many times before I decided I actually believed it, is beautiful.” He also added that “the fact that it’s a distributed ledger without a third-party trust system is awesome, and a fundamental breakthrough.” Levchin would also seemingly take a positive stance on the underlying database structure, if not Bitcoin a a currency itself, claiming “I am confident that there will be a form of settlement that will be a cryptocurrency. And the ledger piece, there’s no need to reinvent that. The bitcoin distributed ledger is a fundamentally sound idea and it will get used, maybe in a slightly different format.”

Thiel would take a slightly differing approach with his public views on Bitcoin, stating that, despite its lack of a payment system, it held much potential. In a 2017 interview with Fox Business, Thiel articulated this idea further:

“It’s like a reserve form of money. It’s like gold and it’s just a store of value. You don’t actually need to use it to make payment… If bitcoin ends up being the cyber equivalent of gold and it has a great potential left and it’s a very different kind of thing from what people in Silicon Valley focus on – companies, not algorithms not protocols – but this might be maybe one exception that is very underestimated.”

In a telling comparison, back in 2014, Thiel concluded that “Bitcoin is the opposite of PayPal, in the sense that it actually succeeded in creating a currency.”

PayPal: The New World Currency

In March 2014, a group of early Bitcoiners descended on Lake Tahoe to visit the vacation home of Dan Morehead, a former Goldman Sachs trader who started Pantera Capital after leading the global macro desk at Tiger Management. Morehead, a Princeton graduate, was one of the first investors of Coinbase and his Pantera firm became one of the largest cryptocurrency holders in the world. This meeting, known as Bitcoin Pacifica, attracted the likes of Mt.Gox’s Jed McCaleb, Kraken’s Jesse Powell, BitGold’s Nick Szabo, BTCC’s Bobby Lee and SatoshiDice’s Erik Voorhees, among others. Another unnamed guest was identified as a New York trader who formerly worked at the NSA. As described in the book Digital Gold, after this ex-NSA agent brought up the idea that Bitcoin likely came out of his former agency, one of the first Bitcoin evangelists, Voorhees, revealed his “pet theory” on the identity of Satoshi Nakamoto. Voorhees speculated that Satoshi was “actually a small circle of programmers at some major tech firm, who had been assigned by their company to come up with a new form of online money.” He speculated the firm’s executives deemed the project “too dangerous,” and thus its creators decided to release it anonymously.

While unbeknownst to most, and in spite of their obvious, world-changing success, the true founders’ vision for PayPal and its “new world currency” never materialized before the formative group of early PayPal-ers had moved on to other enterprises. It wasn’t until 2009, with the launch of Bitcoin, or perhaps not until the 2014 founding of Tether – the first USD stablecoin – or maybe not until the 2015 launch of Ethereum, that PayPal’s original vision was achieved. But certainly, as this series implies, it had materialized by PayPal’s 2020 integration with Paxos and the subsequent 2023 announcement of PYUSD. While Thiel’s intended expressions for “world domination” are easy to naively dismiss as enthusiastic rhetoric, his company’s goal to create a new world currency was anything but an afterthought. Brought up in board meetings, discussed in their Silicon Valley offices, and even printed across their T-shirts, PayPal’s aspirations to dismantle the legacy financial system with technology has been publicly resurrected by the emergence of the cryptocurrency industry.

As the former COO of PayPal David Sacks explained to CNBC in 2017, “Bitcoin is fulfilling PayPal’s original vision.” He stated:

“After PayPal I never thought I would get interested in payments again. But bitcoin is fulfilling PayPal’s original vision to create ‘the new world currency.’ We actually had T-shirts printed in 1999 with that mission statement. A payment is just a credit to one account and a debit to another. That’s a database entry. We believed that, if we could get enough people to participate, money would never need to leave the system. PayPal could become the database of money. We added features like interest and debit cards so you’d never have to withdraw funds to the legacy banking system. When we got acquired by eBay, that project kind of stopped. But cryptocurrencies like bitcoin are now fulfilling that original vision. They are doing it in a decentralized way (with a decentralized database called the blockchain) whereas PayPal tried to do it in a centralized way…

In its purest form, currency is confidence. It’s a network effect around an agreed-upon medium of exchange that has some promise of scarcity. Bitcoin enforces its scarcity through a combination of cryptography and economic incentives (“cryptoeconomics”). A lot of people find that more comforting than relying on the good faith of a government. In math we trust. People in the U.S. – and especially longtime participants in the U.S. financial system – have tended to underestimate bitcoin because we have long enjoyed relatively stable political and financial systems. People in parts of the world with less trusted systems have gotten it sooner because almost anything would be preferable to having their life’s work trapped in a fiat currency that could collapse or be confiscated at any moment.”

While these comments were made in 2017, they sound eerily similar to those made by Thiel before 2000 in the early PayPal offices. In The PayPal Wars, the insider account of PayPal from an early marketing hire Eric M. Jackson, an illuminating company meeting led by Thiel is depicted in which the young entrepreneur articulates an apparent altruistic good that comes downstream from the technology-driven dollarization of the developing world, and what PayPal was intending to deliver:

“We’re definitely onto something big. The need PayPal answers is monumental. Everyone in the world needs money – to get paid, to trade, to live. Paper money is an ancient technology and an inconvenient means of payment. You can run out of it. It wears out. It can get lost or stolen. In the twenty-first century, people need a form of money that’s more convenient and secure, something that can be accessed from anywhere with a PDA or an Internet connection.

Of course, what we’re calling ‘convenient’ for American users will be revolutionary for the developing world. Many of these countries’ governments play fast and loose with their currencies…They use inflation and sometimes wholesale currency devaluations, like we saw in Russia and several Southeast Asian countries last year, to take wealth away from their citizens. Most of the ordinary people there never have an opportunity to open an offshore account or to get their hands on more than a few bills of a stable currency like U.S. dollars.

Eventually PayPal will be able to change this. In the future, when we make our service available outside the U.S. and as Internet penetration continues to expand to all economic tiers of people, PayPal will give citizens worldwide more direct control over their currencies than they ever had before. It will be nearly impossible for corrupt governments to steal wealth from their people through their old means because if they try the people will switch to dollars or Pounds or Yen, in effect dumping the worthless local currency for something more secure.”

Thiel would conclude that he has “no doubt that this company has the chance to become the Microsoft of payments, the financial operating system of the world.”

While PayPal may have faltered where Bitcoin thrived, as articulated in The Chain series, their fingerprints are all over the history of Bitcoin. As an early PayPal programmer states in The PayPal Wars, “Why move atoms in order to exchange bits?” In 2009, the first year of the network’s existence, Martti Malmi, a Satoshi-collaborator and software developer from Finland, made the first ever Bitcoin transaction for dollars, selling 5,050 BTC for $5.02 to early Bitcoiner NewLibertyStandard, with the dollar-end of the transaction settled using PayPal. NewLibertyStandard then started the first ever Bitcoin exchange, New Liberty Standard (NLS), which settled it fiat needs using PayPal, allowing the first ever Bitcoin/USD exchange rate to be published on NLS on October 5, 2009. Another early Bitcoin exchange, The Bitcoin Market, went live in March 2010, using PayPal again for all dollar-denominated needs. Even Jed McCaleb’s Mt.Gox, the first prominent exchange of Bitcoin, also handled all their dollar settlements using PayPal.

PayPal itself wouldn’t publicly affiliate itself with Bitcoin until April 2013 when then-President of PayPal David Marcus told Bloomberg “I’ve been spending a lot of time looking at it and it’s truly fascinating. The way that the currency has been designed and the way inflation is built in to pay for miners and all of that is truly fascinating… I think for us at PayPal, it’s just a question of whether bitcoin will make its way … as a funding instrument or not.” Marcus concluded by stating, “We’re kind of thinking about it.” Seven months later, in November 2013, eBay President John Donahoe echoed this idea, telling the Financial Times that PayPal (then-owned by eBay) may one day accept Bitcoin natively. In September 2014, PayPal even released a short promotional video titled “PayPal Voices” that included someone saying “Our phone is our wallet. We can spend bitcoin with a tap, without a pocket.” This clip was quickly replaced by a nearly identical promo instead saying, “Our phone is our wallet. One touch to buy just about anything without sharing our credit card and banking details.” Also in September 2014, Thiel appeared on a Reddit Ask Me Anything, in which he stated “PayPal built a payment system but failed in its goal in creating a ‘new world currency’ (our slogan from back in 2000). Bitcoin seems to have created a new currency (at least on the level of speculation), but the payment system is badly lacking.”

With the 2020 partnership with Paxos, PayPal’s founding mission converged directly with Bitcoin’s novel database architecture and its internet-native asset, complete with stablecoins like their PYUSD acting as a payment medium, for a truly new global financial system. With their regulators at bay, their politicians soon to be – if not already – in office, and their technology stack built and distributed across the planet, the Bitcoin-Dollar system has been carefully constructed. Furthermore, this system has presented itself as a randomized organization of separate entities, rather than a cleverly hidden network of technologists and economists working in tandem towards a desired goal.

A disinflationary monetary reserve asset, such as Bitcoin, which is heavily custodied within the United States, complete with an internet-based, transparent payment system built on stablecoins backed by government debt, preserves the dual banking system within the country and effectively neuters the world’s nation states from fighting capital flight towards an ever-inflating, yet ever-demanded dollar. Thiel himself stated that “the ability to move money fluidly and the erosion of the nation-state are closely related.” When Bitcoin broke $60,000 in 2021, Thiel felt “it surely tells us that we are at a complete bankruptcy moment for the central banks.”

At Libertopia 2010, Thiel told the crowd of the founding intentions of PayPal, and how within technology lies the ability to circumnavigate the political system and the global order of currency:

“The initial founding vision [of PayPal] was that we were going to use technology to change the whole world and basically overturn the monetary system of the world… We could never win an election on getting certain things because we were in such a small minority, but maybe you could unilateral change the world without having to constantly convince people and beg people and plead with people who are never going to agree with you through technological means, and this is where I think technology is this incredible alternative to politics.”

With the recent embrace of Bitcoin and stablecoins by Wall Street, Senators, and presidential candidates as a means to extend the dollar’s world reserve status, the anti-state framing of the early Bitcoin ethos has withered on the vine – at least as it applies to the United States. The cryptocurrency industry at large, with a handful of dollar-denominated stablecoin issuers operating on a dozen-or-so dollarized blockchains, has become a tool of U.S. empire building, at the expense of other nation states and central banks around the world. The sales pitch of the blockchain being a mechanism for financial empowerment for the individuals of the world has been slowly and carefully replaced with one that perpetuates the hegemony of Silicon Valley oligarchs and their Washington, DC counterparts. The window for making Bitcoin a means for global freedom is quickly shutting, and with it, the realities of a financial system based on private-issuers of tokenized dollars upheld by public, transparent blockchains are made apparent. The poles of power remain deeply entrenched between the coasts of the continental United States, and those in command of The Chain – the new digital Federal Reserve – wield immense leverage over the global financial system.

Thiel would put it simply, in a fitting conclusion: “We need to take over the world, we can’t slow down now.”

The Chain Of Command: How Facebook’s Libra, Bank Regulators, and PayPal Built A New World Currency.