Home Bitcoin & Crypto from a law makers perspective – Lord Fusitu’a from the Nation of Tonga

Bitcoin & Crypto from a law makers perspective – Lord Fusitu’a from the Nation of Tonga

by smart

well hello and welcome back to another market conversations i am absolutely honored to be joined tonight by lord fisa suma from the nation of tonka now he’s a politician but by trade in education a barrister and this is in the u.s vernacular would be an attorney right a solicitor and barristers all operate within the legal system now what i found really interesting is i found this young man while i was watching a what bitcoin did podcast with peter mccormick and i found his conversation to be so interesting in his story to be absolutely compelling now he’s going to be coming to us live from his hote uh his hospital bed he had a bit of a health scare matter of fact it is a blessing that he is still with us so tonight’s conversation will probably not include a tremendous amount of interaction from you folks but if you have questions please put them up we’ll do our very best to get to them but without any further ado let me bring in the lord how are you i am so happy to have you with me tonight i’m i’m very well thank you brother i appreciate the invitation jerry it’s an absolute honour to be here uh yeah and i hope uh there will be some utility of uh of any contribution i may be able to make uh it’s a great privilege to be i appreciate the invitation no well thank you i’ll tell you one of one of the miraculous things that i found very fascinating specifically this year in the year 2021 having been in crypto since the very beginning of 2018 is that politicians are having conversations this was not present in 2018 so to have your unique perspective on you know as a lawmaker for your country what it means to have a a decentralized monetary network not only available but that presents some very strong advantages for your country so i just want to give the the audience a quick backdrop tonga is an island nation they represent about a hundred thousand population on the islands they have a tremendous amount of their either jet uh generation bloodlines in other countries sending remittances back to tonga and their remittance inflows into tonga represent 41 of their gdp and we all know the western unions and moneygrams of the world are in the middle of those transactions taking their piece so let’s start there with what bitcoin specifically and what possibly things like the lightning network could mean to your country uh yeah thank you jerry initially uh as with many of these interviews uh i have to apologize for my informal attire i have medical cream on my back so it makes yeah a gown and a shirt a little bit uh unwieldy uh so thank you for being gracious enough you’re look you’re looking mighty strong young man let me just say that you look like a savage and i love it thank you brother i appreciate that um yeah so to your question uh you’re right absolutely 41 of our gdp so nearly half of our economy is fueled by remittances from overseas that makes our greatest export our people and because of that dependence as you’ve said western union moneygram the middlemen in the remittance industry which is uh annual is a 700 billion dollar industry worldwide countries like india the philippines mexico get over 50 billion in uh in remittances uh so uh for us in the emerging markets a developing world uh it’s a it’s a it’s a big chunk uh in el salvador uh it’s about 20 of their their gdp but for us as you said it’s 41 so when uh i became a bitcoiner which was a little while ago uh i understood that uh bitcoin um for all intents and purposes is the most pristine asset uh that man’s ever created it’s inherently scarce it’s durable portable fungible uniform it holds its value over space and time i can send some to you on the other side of the planet and in a nanosecond you’ll receive it and it’s of the same value so it holds its value across space it holds its value across time because if i bury it and dig it up in five years uh the annual appreciation rate of 200 per annum means in five years it’ll be uh one thousand percent uh increased in value so for the developed world i saw that this was a great store of value it was as uh michael saylor has often said uh it’s better at being fiat than fear is and it’s better at being gold than gold is because it is a better store of value than gold and it is a better money than fiats but for the developing world um it could make life-changing paradigm shifts right now immediately and i say that because um on average with us in tonga western union takes about 30 in fees so if you had heard the interview with jack malus and peter mccormick uh jack said in el salvador it’s it’s upwards of 50 percent uh for us it’s 30 percent so if you send a hundred dollars uh in tonga they’ll receive 70 so that’s 30 dollars gone so with lightning the network and with strike um we can make it so that when you send a hundred dollars from overseas it costs point zero zero zero zero zero two sets so it’s effectively free and on the lightning network uh as you know uh it doesn’t take the 10 minutes or half an hour of the base layer uh it’s there in nanoseconds i’ve done a facetime test where it’s come up on my friend’s phone as received in paris before it’s actually registered on my phone and sent that’s how quick uh lightning is so that speed and cheapness means uh literally we can add 30 percent of our uh gdp back uh into people’s pockets by then receiving uh a hundred dollars instead of 70. so that begs the question for me especially for you as a lawmaker who’s sitting in parliament right right do you call your body parliament yes indeed okay so you’re sitting in parliament and here is this technology that’s free it’s open source right exactly the tax base that can be expanded as a direct result of that wave that extra 30 wave of money that comes into your country i mean geez when when you guys are scrambling for infrastructure bills to put in a new road or or uh maybe a new hospital or maybe you’re thinking about expanding um uh post-high school education with a university or or something of that level you would think this would be a very advantageous thing so i have to ask you as a lawmaker right i mean you’re a human being and a wonderful one that that i found very easy you’re educated and um you’re a bitcoiner but you’re also a lawmaker and so one of the things i wanted to pick your mind about as a lawmaker is there a monetary incentive to create a bill that allows bitcoin to be property and and interact with your quote unquote banking system yeah so after uh considerable uh research and thoughts uh the playbook that president bucheller has laid out in el salvador is perfect for the developing world so he’s got it uh in three stages the first stage which is perfect for tonga as a policy maker and legislator excuse me strike and lightning uh have such efficacy because they don’t require uh a a bill in parliament they don’t even require endorsement by the central bank this is a purely commercial solution because it’s leveraging the network not the asset bitcoin that’s right so okay coin the rails uh in the states you can either load up strike with fiat cash or connect it to your chase account uh and send you send it in fiat so you’re sending us dollars to tyre strike turns it into bitcoin under the hood so it can use uh the lightning network rails uh zooms cross border in a nanosecond hits tonga and gets changed back into fiat in tonga so the person receives fiat uh but that could be your national currency uh well this is even without being a currency this is just a remittance so uh they receive it uh in fiat or with strike you can hold it either the sender has the choice to send us bitcoin or fiat the receiver has the choice to receive as bitcoin to fear and hold as bitcoin or fiat and then what they do is they go to a participating shop front uh jack mal has set them up as cash points a thousand cash points in central america all we need to do is make an agreement with the five percent of our population who are ethnically chinese who dominate nearly 100 pretty much 100 percent of our retail sector and they would be there therefore they would become the cash points they would be the cash points okay so this would be a private sector endeavor as opposed to ruled out okay exactly exactly so they’re already um receiving uh transacting in sets we’re already sending remittances uh to warm wallets on layer one because even on layer one with the higher fees it’s still cheaper but then western union by a factor of four to 10x so that’s just layer one so they’re already receiving sats i’m not sure if you’ve heard of a company called digisell it’s an irish country yeah who operates mainly out of emerging markets africa south america the caribbean and the pacific and what they really make their money off is digital fiat uh remittances so you go on a website anywhere and you send money as you would from western union directly to a digital handset so in order to have a digital handset to receive the phones did you still have to make sure everyone has handsets so they roll out free uh chinese android phones to the population so that they’re able to take the 30 cut of everything those people receive so they also roll out the point of sale hardware vendors exactly so they’ve rolled out the hardware at the chinese vendors so that you can go with that digital figure and cash it out into paper fiat or spend a bit of it off the phone and keep the rest or spend a bit of it in paper fiat and keep the rest so ironically they’ve laid out the infrastructure required for strike because all you need to do is put strike on those chinese android phones everyone has and tell the vendors uh everyone that shops here if they’re using strike are going to have 30 more disposable income to spend at your shop so chinese vendors see only one color and that’s money so if there’s an extra 30 percent they already know the technology because they’ve been receiving uh warm wallet cash outs is in in in this scenario right and i see how easy and how advantageous on the ground the boots on the ground my question is then how does um as long as all these transactions are like aboveboard and recorded yeah then there could be an expansion of your tax base well this is exactly the thing there is uh because in informal economies like ours um solo sole proprietor fishermen and sole proprietor farmers don’t usually have bank accounts because uh the we don’t have a national bank anymore and the predatory the predatory foreign banks don’t give our poor farmers and fishermen access to capital so they don’t bother getting bank accounts that being the case uh it’s hard to tax them with income tax so what countries like us do is we put a blanket goods and services tax on everything that means so it’s happening on the goods and services level that’s where the tax is taken well that’s fine and and that would happen in these storefronts exactly so these two fronts have to keep a record of the 15 extra tax they they receive because that has to be given to the government so there’s a very um clear and detailed system for that so that means that every person receiving remittances is now going into the store with 30 more disposable income and therefore he’s injecting 30 percent more disposable income into that 15 tax that he’s that’s being charged of him so the government coffers go up by 30 because that 15 now has the extra uh added 30 from strike in it so it uh it’s a win for the customer it’s a win for the vendor it’s a win for the government coffers and then for those um after a while when you first get the extra 30 you’re going to spend it to increase your standard of living if you’re a farmer then maybe your kids can go to school with breakfast every day of the week rather than just four days a week or three days a week and you’ll spend that extra money but after a while you’ll remember you got by on the 70 it was hand to mouth mind you but you got by so for the first time you’ll think i’ve been hand to mouth all my life and now with this 30 percent i actually have a chance at having savings i can put something away for later in life and for my children so because strike lets you hold both they can effectively begin stacking sats like someone in the west yeah so exa so once they begin stacking sets um bitcoin instead of as in the west beginning as a store of value and working towards being a medium of exchange and hopefully a unit of account is beginning as a medium of exchange and then working towards when they learn uh that they can save then it’ll work begin uh becoming a store of value so once there are enough people in that economy stacking sets with an asset that appreciates a 200 per annum then the value of the entire economy increases uh accordingly with that increase in value so strike and the lightning network will be completely game-changing someone who had no glimpse at the end of the tunnel that there might possibly be uh any minor savings he’s now in a position uh not just to save uh but to save enough to work towards firstly financial freedom uh and then if long enough generational wealth that he can leave uh to his descendants so absolutely paradigm changing right now no legislation required no endorsement because the vendors aren’t acting as as brokers as a financial services operator they’re just receiving another form of currency just as if someone turned up with a us dollar and said uh can i pay for this in u.s dollars what the chinese usually do is say yes we’ll take it but we only take it at face value yeah see that they’re smart because the us dollar is worth nearly three tonne dollars so they say we’ll accept it but just dollar for dollars so one us dollar we’re going to count it as one common dollar and do that so they’re not acting as a broker and their acceptance of strike and sets is exactly the same they’re not acting as a broker they’re merely accepting to receive another kind of currency so there’s no need for um endorsement from the central bank so a purely commercial solution i totally get that now now there’s the other side of that and this is this is the side that i came in on right i’m from the west and and i came in uh digital assets crypto from the investable asset side right knowing full well that my projection right my thesis was that through scarcity and through adoption there would be appreciation and value okay great but that begs the question now because that is an element for instance in tonga what are property rights like uh are they similar to the west are they i lived in hawaii for a year and a half and what a wonderful experience that was i was one of the lucky people that the island accepted me nice right and so i love the culture um you know every every woman is auntie every every you know man is either uncle or brother depending upon age um because we have wonderful culture so but i’m i’m very well aware that property rights are different from that’s right you know in islands and so i’m just curious what property rights are like and how you guys treat property in tonga because bitcoin as an asset in in much of the world is a property it’s not a currency that’s right it’s a property and so how do you guys look at that well that’s that’s an interesting discussion for later okay um the reason that they’re scrambling for uh taxation and legislation models excuse me uh biden has put 80 billion into the irs and is advertising 37 000 new jobs to try and find a taxation and particularly a legislative model because in the west bitcoin is the only entity in the history of mankind that is treated as two different things under the law so for the purposes of exchange and purchase of bitcoin it’s treated as a money that’s why you’re kyc amled you can only kyc aml for money i work in international anti-corruption with the united nations office on drugs and crime and gopac which is the parliamentary ring and the reason you get kyc amild is to send that data to us so we track with nato the illicit financial flows to the middle east and to isis and as we said before uh to the tribes in china to the cartels but when you get taxed you get taxed as an asset that’s why you pay capital gains tax so it’s it’s a money and an asset at the same time and that’s strictly contra legal um the the principle of double jeopardy where you can’t get tried for the same thing twice if you acquitted of shooting someone and then they get cctv the next day of you pulling the trigger and killing them you can’t get tried again because you can’t get treated legally twice for the one infraction uh and with bitcoin they’re treating it as two separate things money uh when they need it for financial monitoring and law enforcement and then an asset to get capital gains tax out of you which leads to another interesting discussion i’ll go down this rabbit hole and then come back okay a usc uh economics professor came into a clubhouse room uh of bitcoins and said to us uh fiat has the state to enforce my property rights if anyone infringes my property rights uh the state steps in and enforces them where who enforces your property rights in bitcoin and his purpose was of course uh to say to get an answer of nobody because then he makes bitcoin look silly so i said uh i do we do when with bitcoin you’re in the code in the code itself does exactly in the code itself it makes us sovereign over our assets completely sovereign but with that sovereignty and that responsibility with that power comes responsibility so it’s my responsibility to ensure that i don’t leave uh the bitcoin on uh coinbase for too long uh if you do use coinbase i don’t but as an example because uh that’s actually a fiat interest you’ve bought in someone else’s bitcoin uh you don’t own that bitcoin because you don’t have uh the private keys and i have to be responsible enough because i’m sovereign to know to move it to a warm wallet uh because then i have uh the private keys and i own the bitcoin and it’s i’ve self-casted it that’s my exercise of my sovereign enforcement of my property rights there’s no if i forget those sea praises that’s gone there’s no government agency to run to uh that’s the price you pay for sovereignty but to the logical conclusion of the argument i will then it’s my responsibility to put it uh into cold storage uh and to have the seed phrases uh engraved uh or punched uh into metal plates uh and to have uh triple kill of triplicates so a seven of nine multi-sig uh with a number of hardware uh uh wallets a number of hardware keys or points of failure a lawyer and an accountant both of whom are under fiduciary duty to be punishable by imprisonment if they breach and then copies in deep cold storage uh and the point of that is again i’m sovereign uh therefore i have i am enforcing my property rights this is all my responsibility but the upshot of that is if i am um protecting and enforcing my own property rights and in a national budget when you pass a budget it’s it’s an it’s an act of parliament or an act of congress so it’s a law so if it says you spend ten dollars uh a hundred dollars uh fixing the road in front of uh jerry’s house that’s where the only place you’re allowed to spend it you can’t spend it anywhere else unless you get a legal violence so the tax is collected for a very specific purpose so taxes are collected from tolls etc to do the roads so if you’re not enforcing any prop of my property rights why am i paying the state tax for no service you’re not giving me any service whatsoever with respect to my bitcoin you don’t protect it uh you don’t have any uh guidelines uh on how it should be regulated uh so that being the case uh why a bitcoin is paying any tax at all on an asset which the state has no part uh in gathering or protecting for them uh and that sent him away with yeah uh the economic the keynesian economics professor uh just quietly uh sort of meandered out you got a bit you got a big spool of austrian economics and went whoa okay i’m in the wrong room so you know that that takes me to the next question now if any of this stuff you’re not allowed to talk about i’m i will completely respect that but i don’t know so i’m going to ask i’m supposed to answer the the land the property matters okay so in tonga the sale of land is illegal full stop you can’t sell land to foreigners you can’t sell land to each other the only way tongans in uh get possession ownership of land is through succession if you inherited through our very uh our very detailed succession laws and the way to get new land is in our constitution every male at the age of 16 if he is of proper full mental capacity gets a free quarter acre of land from the state to live on in a village or urban area and a free eight acres in a rural area to farm to feed himself and his family free just free all you have to do is turn up with your birth certificate saying i’m tongan i was born here i’m 16 years old now i want my land and by law it has to be given so that land is given from the estates of the king and the lords because we own the land so by law when someone from my village turns up and says i’m 16 i want my land now by law it says you have to give it to him there’s no reason that you can possibly put up not to give it to it and that’s why tongans are terrible at meeting rent payments when they go overseas because they think all land is supposed to be free well let me let me ask you this then because again okay so my year and a half on the big island of hawaii showed me a couple of things showed me that the western mentality on an island is actually extremely expensive and cumbersome because so much is imported to create that western lifestyle is does does tonga suffer from that same mentality or you still hold many of your traditional we know how to grow our own food we do grow our own food we’re not so we still do traditional farming but after world war ii uh when there’s massive food shortages uh it became a sign of being middle class to eat foreign food so then you would eat bread instead of yams and you would eat baked beans and bacon instead of the traditional fresh fish and shellfish and you’d eat corn flakes instead of fresh fruits and vegetables so that has caused um tolerance are more are now the two most obese countries on the planet um we are large uh mesomorphs anyway but the the western diet since 1940 has caused lifestyle diseases such that ncds non-communicable diseases are our major killer now uh diabetes your heart disease all the metabolic disorders that’s it there’s a great push to go back to our um our old way of eating uh so fishermen obviously make more money exporting fish but we’re now giving them tax breaks if you offload at least half your load domestically we’ll make that tax free so and another reason why people are eating like that is that uh the mutton flaps that people don’t eat in the west it’s fed to dogs uh they dump all that uh in the pacific and in the developing world so that really bad meat is cheaper than fresh fish because i’ve been overseas to a supermarket and gone to the butcher section and said uh can i have some mutton flaps because the tongan boys wanted to have a tongan traditional barbecue and he said oh just give me i said give me about 20 kilos so he gave me 20 kilos and i said how much and he said i’ll just give me a dollar to show up on the register we don’t we don’t sell this this is for the dogs people just take it for dog food and that’s the kind of meat that gets dumped in the pacific if you look at our trade figures uh the largest part of our imports from the us and from australia new zealand is that cheap meat uh and one of the problems even more so than the canned goods in the boxed uh boxed carbohydrate products like macaroni and cheeses pastas and cereals it’s that that meat wow okay that meat and that tin you would have seen in hawaii that canned corn beef yeah well we they spam spam yeah it’s basically spain uh and it’s got a lot of 30 different flavors yeah it’s got a lot of water and jelly oh it’s huge oh yeah absolutely that’s it it’s that meat though that canned meat and the cheap uh off-cut meats that make up two nearly three-quarters of our imports from those three countries and the problem also is that uh globally the world bank and the imf uh gave excuse me loans to countries and forced certain austerity measures on them made sure that they uh didn’t uh build up any telecommunications or industrial sectors because their their objective was to keep africa south america the pacific the caribbean as plantations and mines to feed raw materials to the developed world now the developed world gets them at a cheap price for consumption and some of the raw materials they process into processed products and send them back and the island countries import them at a much higher premium so that we’re always in a trade deficit the imports always outweigh the exports so when we meet annually with the us new zealand australian diplomats to to discuss their aid packages and they say oh you know we give you so much like new zealand said oh we you know we’re giving you 22.9 million dollars in aid this year and i said yeah but we’re buying 358 million dollars worth of rubbish meat from you so who has who gets the benefit out of this uh i think yeah exactly not to mention all those folks that are profiting from all the other non we’ll call non-edible imports so when i was in hawaii there was a huge push towards renewable energy sources and and as they should you should try to be as self-sufficient as possible however all the actual infrastructure is diesel-based uh power generation exactly tell me tell me one single oil field in tonga zero zero so every single watt that’s produced is coming from an imported product that and the dirtiest and most expensive kind of electricity to generate is digital electricity and every month we have that ship that shell bp ship that comes out at the end of the reef and locks onto that pipe that comes all the way to shore and there’s massive tanks excuse me along the shoreline and yeah no one’s thought we’ve we’ve begun branching out there’s solar farms and wind farms uh that are joint ventures with china tonga is looking at being uh 100 green by 2030. yes excellent because we’re small enough uh economies of scale make it practical for us to be able to do that quickly well you’ve got hydroelectric possibilities right because anytime you up no you’re you don’t have any volcanoes then no elevations uh we do have some my estate my island is a volcano it’s the only populated volcano uh we’re about 350 meters above sea level oh that’s nothing yeah so that’s not very much elevation yeah but once the plans for uh the bitcoin rollout became public i was approached by a number of uh geothermal and wave harnessing uh energy companies sure you got tied all the time constant exactly and my island is the choppiest they’ve got a a unit that’s built out of portland oregon that’s about the size of a football field uh and it’s basically an upside down empty box with a top half having a unit and a turbine so as you know when you push a box down uh air runs up into the the cavity and that air pushed up spins the turbine and when the box goes back up the air rushes out suction and keeps the turbine spinning so it’s green because there’s no um bolting to the seafloor there’s only the cable that runs uh to take the power onshore uh so fish even whales can fit up and under it um algae can grow on it uh freely uh so that’s probably the best wave harnessing solution and the geothermal guys um it’s even more so this is obviously all geared towards bitcoin mining that’s the part of these solutions they were being offered because uh yeah they’re big corners and they wanted to see uh the little engine that could the little island do well and uh i get with bitcoin so the geothermal mining um my mine is the largest volcano and populated but there are 20 others so with a population of 100 651 have one volcano for every four thousand seven hundred and twenty people uh so about two megawatts one in a bit can cover that many people uh but each of the volcanoes produced 95 megawatts so that’s nearly 2 000 megawatts in electricity our country will use maybe 10 max 20 so not only can it do bitcoin mining it will power the entire nation uh and well and every auxiliary function that comes after that so goodbye gasoline-powered vehicles hello electric vehicles exactly everything that’s uh possibly electric powered all the ancillary industries that rely on electricity will blossom and as you’ll know from electrical engineering electricity doesn’t travel more than 500 kilometers it loses voltage that’s why uh those uh waterfalls in china and south america uh bitcoin miners seek them out because uh they’re too far for for residential population to make use of so bitcoin miners seek them out but for fortunately for us samoa and fiji are less than 500 kilometers away so we have enough access to export electricity to them the way canada exports to new york and new jersey and even if that goes away in the future because they develop their own yeah sources the the ability to monetize a natural resource that’s green now all of a sudden instead of the state or your nation right sponsoring and coming out of the tax coffers to subsidize whatever industry your people need to survive now you’ve got outside industry coming to your island creating excess so they will create some jobs they’ll create excess powers they’ll create value and that value as you know will disperse itself throughout your economy i think the only missing piece here is the curriculum that you and i build around financial literacy to start keeping in your public education system because because that excess of electricity uh and the level of bitcoin mining that’s possible with that makes it a no-brainer that we will need to set up a sovereign wealth fund absolutely and to set up a sovereign wealth fund and have it managed correctly we need generations of financially literate people from now into the future to be able to manage these resources and manage them properly so that they are fully sustainable uh generationally so it never uh ebbs out when a new generation comes it’s able uh to power each generation as it goes so financial literacy is at the core of uh of what what will be um the the what they call the result the reason for being for this enco entire ecosystem of power generation bitcoin mining green energy is to have a sovereign wealth fund uh that will solve uh our reliance on relationships with uh uh foreign commercial banks and uh the adherence or attachment of our own central bank uh to the international fiat central banking system we’re fortunate enough in the emerging markets that we have younger central bank uh histories uh they’re not as entrenched as the the centuries and centuries that the g7 have of central banks which makes it very difficult for them to pry themselves loose and will make it most likely that the g7 nations as you would expect will be the last to adopt bitcoin uh fully uh i think the development the incentives aren’t nearly as great as they are for you but here here so so with that being said one of the in this i see isn’t absolute um absolutely george um this incredible um place in time because traditionally the tongan culture is always been about education so pre-colonial exposure the education was hunt gather farm fish uh shelter uh party interaction relationships storytelling colonials come all revolves around um the nuclear and the extended family units because we’re all family that’s what i love about the island nations your blood and my blood somewhere down the line is interconnected there’s so much heart in that and i just want to praise you for for sharing that because a lot of the western world is a take care of themselves type of thing and their truth is there are many cultures on the planet that are still very much ingrained with hey we’re all one people folks that’s right and there’s we have a tangible economic um indicator to measure that which is the remittances why do they send remittances because of that family connection they’re sending money back without the family connection we would have no remittances it is their adherence to our system where we have the nuclear family with the father at the head and the mother holding the social rank then the nuclear families of you your family and your siblings families all gather into an extended family that has an elder at the head a male elder which we call ulum and then those extended families all group together and form a village and they have a lord whose estate is the village and he oversees and protects them uh then the lords are gathered into clans the lord’s grouped into clans historically with a a clan head who is the most senior lord and then all those clans grouped together into a nation with his majesty as the figurative father of the nation so the entire social structure of our our country is based entirely around the family and those family ties are the ones that cause people who have never seen time three generations born in the us but raised in our traditional family culture and they still send money back to the island still sending remittances back so as i said our economy has a tangible uh measurement of the efficacy of our family system which is the 41 uh of our uh sure well i mean that’s one manifestation of it but the one that i think is the most promising for i mean i think that’s wonderful and that’s great but i think one of the the core um benefits is that from a very very early age tongan’s tongue and culture is teach and learn it’s it’s this very much um forever it was a verbal it was a verbal tradition of passing knowledge that’s right schools are a relatively new invention that’s why for instance with climate change um there are climate scientists that measure that now but we have oral traditions for a millennia which tell us uh two or three hundred years ago storms would occur uh maybe once every five years and oral tradition they tell us the stories so that we have that knowledge of how the weather’s changed and how to uh have our indigenous traditional knowledge to adapt for it so we know when the sea levels rise and it begins to erode the coast we have to plant mangroves because mangroves do natural land reclamation mangroves soil will grow up around it so that historical knowledge is there and when we became westminster constitutional monarchy and adopted a western system of education the current king’s father he’s considered the father of tong as it is today and he ingrained in our culture a belief that you must he made education free completely from pre-k to 12th grade and he made it compulsory from pre-k to junior high okay and that indoctrination of you’ve got to matriculate get a degree and make yourself make it such that you have options in the job market because you’re well educated enough and with that skill you come back to tonga and try to help build the country in the sector that you are in so it was so ingrained that if you check the guinness book of records tolerance have more phds per capita than any other race on the planet um purely because yeah of that that push for education no i i’m it’s so encouraging and it just i think at a core level the sky’s the limit for tonga right i mean it’s like i think we’re positioned in a point in history where you’re small enough that you guys are nimble enough that’s right yeah you you can you can on an energy sector on a monetary sector and and a a a complete 180 of the traditional way of doing things turn yourselves from a net importer to a net exporter whether it’s next exporting intelligence or education exporting um goods and services that meet this new 21st century whether that bitcoin mining or or you know what whatever i i’m just so encouraged and i’m so glad that i’m getting to connect with you i think that that analysis is spot on because of our size and the economies of scale that are possible with a small country we can move freely enough along the axes of energy data when we got our fiber optic cable laid my mother was the minister of communications and information at the time so she was responsible for the cable being laid so she had a bit of a nerd as the sun and i pestered her and tested it to make sure she got sufficient bandwidth for the country so we ended up getting hundreds of gigabits up and down fiber to the door so in islands like mine where parts have no electricity or running water they’ve got 4g internet service because we rolled that out you know what i don’t need a lot but i’m telling you i would i’ve become very uh accustomed to my connectivity yeah and they’re able to to work through it and study through it yeah we can get lectures our students can get lectures from harvard online uh you have access to sailor.org exactly exactly and also because we’ve got so much bandwidth i’ve reached an agreement with cisco cisco is going to build server farms in tonga and for equity in the project i supply the land they supply the hardware and the expertise and the management and we’ll be large enough and have enough bandwidth and actually more bandwidth that will be reliable enough to offer aws southern hemisphere which is based out of sydney cheaper solutions with us so and that’s just one client um there are numerous uh that’s right yeah that is so incredible i want to break in just for a second we’re getting close to the end of my show but i have a tradition every week i bring in this young lady from africa who migrated to the united states lives up in the northwest and she’s an enthusiastic learner who is recently in the last year and a half or so started wrapping her mind around learning to invest she knew you were going to be my guest tonight and she’s brought a question for you i’d like to introduce you to bitter bitter avenue hi how are you doing it’s nice to meet you did you bring did you bring a question for our esteemed guest tonight i sure did you know i would i hope it’s not saying it’s not so difficult for me no no i actually i actually asked very basic um questions just so that a lot of the audience that i have especially on instagram um they’re most of them are very you know beginner investors um i’ve actually the time just flies jerry it’s been close to three years now that i’ve started learning about oh it’s been three years already i mean my kid is about i started before my kid was born and my kid is about to be two so it’s been very close to three years which is crazy where are you from i’m from ethiopia originally wow east africa yes ethiopia and tonga are the only two bipod nations that were never colonized i i believe there’s one more in africa that is um yes i i’m not sure i know is us in ethiopia but i think you might be right yeah there’s one more in africa i don’t know if it’s libya or libya liberia one of liberia one of them is a kingdom yes one of them has also never been colonized we are actually going through a civil war right now but it’s been but it’s still internal so the reason i say it is because the king that rules over us now his family has ruled over us peacefully for 2000 years so without any colonization in between and yeah that’s something that we have in common uh you’ve had a long line of succession uh of rulers of varying degrees i understand but uh yeah there’s a brilliant history to have yes yes actually half my family is actually from tigray which is why i always wear my tiger shirt because that’s where the genocide is going on right now so it’s yeah pretty close to my heart so it’s been crazy thank you george’s curriculus that’s right i’m sorry george put up a post that actually liberia was a colony it was a us colony oh maybe it was one of the other outfits but anyway let’s let’s what an incredible thing of synergy that we have between yeah energy with uh with my brother jerry and i and yeah uh great to learn from uh the energy that you bring uh yeah it’s awesome thank you peter yes thank you for having me so um i was watching um with you guys from the beginning and i didn’t i didn’t hear maybe i missed something um did you say something about did you guys have a law around btc by any chance or any crypto around um like as far as like how it’s treated we were going to there was a bill that was introduced two years ago in parliament um and there was a section that said uh all matters to do with cryptocurrency uh its management uh enforcement regulation shall be under the purview of uh the thai national reserve bank which says this is our central bank the lord’s the makeup of our house is nine lords 17 people’s reps 26 member house so majority is 14 so but the lord’s our mind we always vote in a block so uh yeah i didn’t believe in the section so i pulled my vote and all my nine lords uh from the the bill until that section was um deleted uh and they ended up doing so uh before passing the bill was to do with the reserve bank it wasn’t about crypto and it just happened to mention here’s another extra power that they’re going to have and i went uh yeah maybe not so yeah we got it struck out okay we have a couple minutes bitter let’s let’s get another one or two in there yeah okay um and then as far as when people are sending remittances through vtc um with the software how is it treated like how does how do you think it affects the people when you know the price is high and then the price drops um how does that get regulated or how do you think that price variation of btc sometimes it’s pretty volatile how does that affect people on a regular basis there if they’re keeping it yeah we haven’t done it yet uh but uh we will adopt the model that um uh that el salvador has done so what else salvador has done is uh they’ve set up a bitcoin trust fund so uh you can receive bitcoin or fiat on strike you can choose how you want to receive it you don’t have to touch bitcoin at all so with the remittance it’s sent in fiat it only gets changed into bitcoin to make use of the rails the lightning network so it can go across borders instead of if you’ve listened to jack malus and uh peter mccormack’s interview instead of the 10 intermediaries jack said he found in remittances used to have to go through before they get to their destination 10 intermediaries so when you send it to western union it’s going through 10 other intermediaries before it gets to your destination so with strike on the lightning network it just goes straight from you to the other person it gets changed back into fiat and they receive fiat so they don’t even know uh that the bitcoin rails were used but they can if they want receive it in bitcoin so to your question if you’re concerned about price uh discovery with bitcoin then you hold it in fiat and you spend the cleanout if you want to take advantage of the 200 per annum appreciation that the asset has then you hold it in bitcoin and you can choose to go back and forth uh transferring it back and forth within the wallet uh as to how you hold it but for actual transacting um the reason they have a bitcoin trust fund is uh as you know if you spend uh in foreign exchange if you spend us dollars in a in a non-us dollar country it’s a forex transaction so they’ll be forex slippage uh because of the uh rise and fall of the currency values uh in el salvador they’ve uh instituted a bitcoin trust fund and if there’s any slippage in a transaction it’s automatically taken out of that trust fund so the strike network is connected to that trust fund so the government eats the difference any slippage whatsoever if you go and it’s from large purchases right down to a one dollar coconut vendor by the side of the road uh if you pay with strike the trust fund ensures that you only get deducted exactly one us dollar from your wallet and the vendor gets exactly one u.s dollar no less uh no more because of the slippage that’s eaten by the government excellent now we got a quick question from george i’m going to throw it up and i think i can answer this because i was listening to you lord is there a capital gains tax involved in the um i’ll uh wait in the use of bitcoin in tonga and i believe the answer correct me if i’m wrong is they don’t have income tax all their taxation is done at point-of-sale yeah in the form of like a sales tax tax so no they don’t um have any issues around yeah there’s no there’s no regulation on bts at the moment all right do you have another question do you have time lord do you have time for another five minutes yeah yeah i’m in hospital man where am i where else am i gonna okay okay let’s what else do you got on that notepad because i know you got a notepad full of stuff yeah yeah hit me with it i’m not gonna trust me it’s sunday afternoon here uh it’s sort of drizzly rainy outside there’s nothing to do um so i’m more than happy to be here right on awesome thank you i well the other questions i had because i assumed you guys had a lot around btc so my other question was really gonna be about um when somebody actually passes away just the way they he was explaining um how the land is you know given to um the next generation if there there was a law around like if somebody has a you know bitcoin or another cryptocurrency how did they get passed on do you have to go through the court process but if there’s no law yet that question would not be no no i mean when i will i i’m pushing for adoption i already have a bill ready to be presented to the house um but uh if you were saying btc is an asset we have separate uh succession laws for real estate for real property and then everything else because not able to be sold and it only goes by succession there are very specific succession laws on how that gets handed down it goes by the eldest the closest eldest male line uh to the deceased so if he has a son it goes to him if the sons passed away and the son has a son that will go to him if the there is no male issue from the first son they’ll look for another son and if there’s no sun they’ll look for a daughter who has a son i’m sorry you see my face like that no there’s no capital gains tax involved in the use of btc and tonight george wow that is great our taxes are done at the point of sale uh goods and services tax means no one can evade taxes because everyone has to buy stuff so that gets whacked on you uh and that’s its whole purpose uh in countries that have a large informal economy like us uh the goods and services taxes make sure no one can evade the tax because you always have to buy things uh and to bitters uh question so the land will go a particular way but personal effects or what we call chattels under the law uh assets uh bitcoin will be uh considered a chattel and therefore uh if you have a will it will go according to your will if you die intestate which means without a will it will go to the widow first a portion to the widow and then the rest is divided amongst the children okay very very interesting now something that a lot of my audience has been interested in and i’ve covered a lot is um relocation out of we’ll call it the the developed world right into like i’m living in costa rica um i have friends that have moved you know all you know outside of very high taxation this you know modernized world into more developing areas for many different reasons one uh quality of life et cetera et cetera et cetera does tonga i heard i thought i heard you discuss briefly and if you could explain citizenship through investment or residency through investment how does something like that work with your property laws and things there are two parts there’s a investment path where a five million dollar fiat investment uh investment meaning just having a bank account that’s in your name and proof that you’ve deposited 5 million into it gives you automatic uh not citizenship but automatic right to apply for the investment citizenship path or you can do it by residency if you’re resident for five years uh you can then you then qualify to apply for citizenship by residency so what a lot of expats have done who have some connection with me is to get a work permit you need an outgoing plane ticket to show that you will eventually leave and a contract of employment to show that you have actual employments so many foreigners who heard of me through contacts in my network approached me and asked me for help and then i put them under contract to work for me uh so i they have a formal contract uh and uh employed by me and then they go off and do whatever it is that they want to do and i keep renewing every two years they come back and i renew their work contract uh and until they reach the five years uh and then uh they’re able to apply for citizenship sure so i do this completely pro bono um because yeah uh we can we need uh people from aboard abroad with skills uh who have a great desire to stay in tonga and help develop a country so yeah i’m very welcoming of that well i would also i would i would ask this question with the real estate right the property laws being what they are basically succession based property laws is you can look for the acquisition through leasing yes you can lease you can’t you least very similar to hawaii many parts of hawaii you cannot buy but you can attain 50-year leases yeah we can we give you up to 99 years okay which are which are also transferable in my family so i can leave it to my side that’s why uh at least interest is transferable uh unlike uh uh an actual uh holding of land least interest is treated as personal property just like all the other channels so under our laws if you pass again it goes first right of refusal is to the widow our laws always try and take care of the widow uh and not leave her uh without any income or any way uh because if she dies if he if you die with two million dollars worth of debt uh she inherits that and how is she supposed to service it other than to inherit uh your land and your interests uh and service the debt so it wasn’t like that previously it went directly to the kids and i myself and another lord made an amendment in 2011 uh to ensure that widows were taken care of because we’ve been approached uh by many widows who have been um not illegally because it was legal but unethically ousted from their land uh and yeah we thought uh it was not right uh we drafted a bill put it to public consultation uh it was popular in the public uh and passed in the house so now widows uh get first to write a refusal uh if the need be for them uh to make a living right yeah you get a regular uh there are five year leases ten year leases a commercial lease is usually 50 years um a long term investment lease is 99 years so all leases require the approval of the minister of lands and the prime minister in cabinet uh 99-year leases require uh the consent uh or sorry all leases that are on estate land require the asset the consent of the estate holder being a lord or one of the lords or the king but the 99 year lease has to go to privy council and has to be approved by the king in privy council uh but this uh they are commercially uh regularly um granted you know what i so another question for like the terminology or the vocabulary in hawaii a community gathering that’s a celebratory type of thing would generally be referred to as a luau right in tonga what is the name for that type of event no george there is no freehold land even for citizens yeah in fee simple there’s no fee simple land uh in tonga whatsoever uh we had considered making uh one part of the main island turning it into a fee simple zone to attract foreign investment but when we only have 750 square kilometers of it uh it’s our most scarce resource uh land so yeah that i that idea was uh put to pasture so ours would be called a ford yeah that’s a gathering of the entire village or entire community to discuss pertinent issues at hand sometimes what are the kinds of things that are affordable traditionally affordable is a gathering where the chief gives his instructions to the people of his estate well what would a party be called a party a celebration um f-a-k-a [ __ ] off it sounds a lot like something else in english yeah a lot of um a lot of italian words use [ __ ] f-a-k-a which means like so we call uh cross-dressers because they’re like a lady okay so means to turn and gather means like a turning or gathering okay okay i mean i i don’t want to say that too often because it could be construed coming out of my mouth as something different but i wanted to say i am putting tonga on my list of places to visit once the world gets through this corona weirdness you guys open up your borders again i don’t know if people know tonka borders are hard blocked there is no in and out until sometime next year march march march 2022 yeah that’s it’s the reason why there’s no covet in tongan uh that’s that’s the only time when it’s a benefit to be a small isolated island yeah keep us away from all that weirdness so yeah um i’m coming and we’re going to have a we’re going to do something we’re going to fukushima our way into some fun and i’m really looking forward we’re going to have a massive massive philosophy when you come yes and you know i again i want to thank you so much for your time um i want to give you an opportunity for any final thoughts i also want to get my producer brady the heads up the final thoughts are coming but lord it’s it’s your final thoughts on your experience with us tonight and and bitcoin as a whole and we’ll make sure that we bring you on um in a future date because you just you’re an incredible man to interact with i hope this is the first of many i’ve thoroughly enjoyed this chat and really appreciate you having me on my final thoughts would go back to the discussion we had about financial literacy for the youth and for the nation um all these initiatives uh bitcoin uh using the rails uh to increase uh our disposable income therefore increasing our gdp uh adoption uh so that we can increase the ability uh of the populace to own an asset that appreciates uh at 200 percent having the bitcoin mining uh the compar the geothermal energy that can power both bitcoin mining national electricity and export it uh all these things to working towards a sovereign wealth fund at every stage of these initiatives a lack of financial literacy can cause it all to collapse so uh yeah i cannot stress how crucial financial literacy uh thank you george it was an absolute pleasure thank you michael i appreciate the the kind words and uh finally uh much thanks to jerry uh for uh this great invitation uh an awesome chat uh the first of many i already uh consider having connected to a a friend uh for life and uh torbita i appreciate your presence very much uh and look forward to seeing your your evolution and growth uh as a bitcoiner uh and as a member of the community so thank you guys so much right on wow that was powerful brady are you ready my friend spring and brady yes sir all right you’re here so bitter let’s give you an opportunity young lady for your final thoughts whether it be on the show um obviously the lord here or um just in general what what do you want to leave the audience with tonight well i have um this is kind of uh not really a final thought but i’ve started my second round of fundraising for it to grind so i will be sending some information to you guys so i am reaching out mostly to a lot of like companies if anybody that you guys know is can has a connection with fund um fundraising what is it uh fund writers or um things like that people that know how to write grant writing with companies and things like that please send me information you can find ig or you can beat the avenue at gmail.com i can use all the help that i can get because our people are in a huge huge danger so anyhow i can get i will take so yes right because i’m i’m uh just lord for situa one word on everything twitter facebook you name it connect with me there i’ll put you in touch with i’m sure ryan has many uh people that work with uh you the un undp all these organizations that do exactly that kind of work uh i’d be more than glad to oh i’m grateful thank you that is phenomenal we’re already in our culture we always have to look after our little sisters well i’ll tell you on twitter on twitter if you go to to lord jesus how do i how do you pronounce your name it’s lord so uh phonetically it’ll be f i love it that’s hard on his twitter profile you can click a thing to his bio and i mean it’s his bio and it’s a link to every single i mean it’s his facebook twitter instagram boom boom who know who knew you had time to do tick-tock you even get my soundcloud and and spotify playlists it’s just it’s phenomenal it’s phenomenal hey brady i’m going to wake you up bro i’m going to put you on the spot for your fight for your final thoughts this was a heck of a show i i agree and it’s it the statement of financial literacy actually just kind of threw me for a spin because i was thinking of the other things that i guess one can be literate in or there’s literacy in general so it just seems interesting that science and math kind of have their own thing but the second you mentioned finance or anything having to do with money it’s like oh yeah that’s that’s the business crowd or those are oh yeah that that’s what you go to learn somewhere else it’s like well no how about like a checking account about like interest rates credit cards like hello yeah so it’s it’s about time we either started educating people or started asking questions hey what’s this whole financial thing what’s yeah you know what’s a yield and how does this work why is it being kept from us i mean it’s not exactly not taught to us exactly exactly yeah we were kept in the dark for a reason and it’s kind of unfortunate but i guess you got to move on and yeah keep your head up and get that knowledge exactly which i’m still getting so it’s the never-ending journey yeah all right i’ll tell you what i’ll pop in here’s mine so recently i’ve just become very aware that my education about this in this digital asset space has really been about assets in understanding the economies and monetary policies around the world and what i’ve become enlightened to recently is the value beyond the assets in the networks and it’s in large part due to our guest here tonight who explained the real value proposition of some of these monetary networks are not necessarily first the asset it’s the actual technology that allows for a freer faster less frictionated use of of of of of what we would consider monetary networks right these these the stuff we grew up on we grew up on it and it was easy for us and we don’t consider the three percent visa takes is a big deal and you know all this stuff but when you’re an island nation dependent 40 of your gdp is coming from bloodlines outside the country remitted back to the country orders a scale in three percents and five percent they really add up and the value proposition that these open decentralized networks are bringing all various elements of our globe to me i’m just i’m even happier and prouder to be a part of this movement it’s not just about generational wealth for me although that is my goal and i’m trying to create that but the empowerment to so many others whether they speak my language or not it doesn’t matter exactly and in this inclusiveness to me just just you know will help alleviate some of the strife in the world and if we can incorporate the financial literacy and allow people to understand that they have a tremendous amount of options with their time they can make money with their time they can exchange time for money but then they can also have that money make more money so that they can do other things with their time than concern themselves with making money exactly what a wonderful path to freedom expression and and and to you know family whether you’re you know related or not related the truth of the matter is we’re all related i want to say thank you for all of you that tuned in uh okay george one last question i’m sorry is the credit system in tonga modeled after the us credits no we don’t have a credit system like that it’s all informal yeah okay i owe you five brother exactly five i’ll get you next time baby okay okay excellent so folks for those of you that continue to tune in weekend week out and hang out right on for those of you that jump into the chat and ask questions and and talk it up thank you so very much for those that have joined the patreon investment group things are starting to look pretty good we’re having a great time i’ll see all of you tomorrow at our uh third sunday of the month meeting and for the rest of you if you haven’t subscribed yet take a moment hit the subscribe button if you like this content hit that little like button and hit the bell for notifications we’ll see you right here next friday on market conversations and until then everybody


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Bitcoin & Crypto from a law makers perspective - Lord Fusitu\'a from the Nation of Tonga
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