DAPPCON 2025: How to Abolish the Dollar & the Future of Crypto - Julio Linares

Transcript

[Applause] Thank you. So, it's a bit stuffy here. Can we stand up for a second? Just stretch a bit. Move around. It's been a lot of talks in the brain. So, just move a bit, jump if you feel like it, and make it a little ah cool. Okay. So, uh just a show of hands. Who here works for an intelligence agency? Okay. Okay, we have one person actually, so I'll be careful. Uh, so I made this talk originally for the DAK day uh that Vitalik uh is like making these days. Uh, and I, you know, that one I only had eight minutes, so I

I'm not be a bit slow today. I'm actually a very slow person. I'm not really into accelerationism unless it's a US dollar abolitionism, but uh, yes. So, how to abolish the dollar and the future of crypto. So, I'm Julia. I'm an economic anthropologist. I also work on poetic technologies. Uh today's views are about uh mostly my work on a book I'm writing called decolonizing money and also uh some of the work that I've been doing and we've been doing with my with my teams over the years with circles and now poetic tech. So here we go. Economics 101. This is what they should have taught you in school. Uh but probably didn't. Uh so how does the US dollar system actually work? Um, so in 1973,

uh, Richard Nixon unpecked the dollar from gold. At the time, you could buy, uh, an ounce of gold for $35, uh, dollars. And that was the sort of standard that we had from the, you know, postwar era, the Breton Woods agreement all the way to 73. At the time Nixon was trying to pay for the war in Vietnam, uh, he was running out of, uh, gold reserves. So his ability to go into deficit was limited by the amount of gold effectively right I think France was buying a lot of them and so what they came up with in the Pentagon was to say what if we just uneg ourselves from gold and become the world's currency reserve currency and also therefore the unit of account of the world. Now a year later uh with the OPEC crisis the US

convinced Saudi Arabia to accept payment for oil only in US dollars and that's the beginning of what we now call the petro dollar system which is a system whereby today any nation in the world can only buy and sell oil in US dollars. Um and that is important because it it is what um if you think of oil today as still the hegemonic energy system of the planet, it is a way of capturing the production system and therefore also labor. So you cannot really have a transition an ecological or economic transition unless we unlink ourselves from this relationship between the dollar and oil. So that nexus is very important. And so how is this system enforced? uh if any country wants to

escape from this regime they will be visited in their door by the US army and so many people don't know this but actually a lot of the value of the dollar comes from the violence of the US army today the US army has over 800 US bases army bases around the world the biggest one is in Germany actually uh and bas in most of their allies in Korea Japan that's where most of the the US army bases are uh and and then we come to like dollars and treasury IUS. What is a treasury IOU? It's effectively a promise of future dollars. So today, investors who want to get a risk-free or low free investment, they can buy US treasury bonds as specific maturity rates. They can be three years, 5 years,

seven years, 10 years, and then eventually get dollars with interest on them. So it's effectively a very cyclical system. As you can tell, it's a triadic structure. And so why does it matter? So today if you think about the US dollar the US government's credit card when they go into debt when they go into deficit when they create money uh famously the Fed issues money as debt and then it's monetizing as US dollars into the banking sector and into the industry sector. Um who actually pays for that? Uh if you think about this system as a world uh tributary system, what central banks uh all over the world do when they hold

dollars and promises of future dollars or treasury IU is effectively giving the US uh their surpluses their uh an interest uh free loan effectively. So it's a it's a very strange system. Some people call it a super imperialism. This kind of system or uber imperialism in the sense that uh it's the first time in history where a state has managed to tax the whole world into paying tribute to them in its own currency. And so this is the system that we're dealing with. Um and basically it's a form of extraction from the peripheries to the center. Most countries in the world today have to pay one-third to half of their national incomes in debt payments uh service to

the IMF, the International Monetary Fund and the World Bank which are append appendages institutions of the US uh imperial industrial complex. And so that's more or less how the system works. Any questions so far? Cool. So, uh what do I mean by abolition and what do I mean by democracy here? So abolition democracy is a term that web Dubois uh famous sociologist from the US was writing at the dawn of the end of slavery in the United States where he argued that formerly freed slaves were not welcome out of slavery with new democratic institutions so that they could have the means of subsistence to

uh be uh welcome out of slavery. Right? uh former slaves became wage slaves or wage laborers uh without any equal footing to uh let's say non non-slaves, right? And so abolition democracy is a vision of justice that seeks to dismantle oppressive structures and systems while simultaneously creating democratic equitable uh ones for society. So it's not just about the dismantling or the abolition of systems in this case the dollar and the dollar institutions. is also about creating counter institutions that are democratic to take their place once those systems are abolished. So that is what uh abolition democracy means in today's world. There is uh people like Angela Davis and Ruth Wilmore Gibson who argue

about the abol abolitionism in the context of prisons in the US. Um we're famously 1% of the population is in prisons within the US. The majority of that are black people. So you dare see the aftermaths of slavery. Um and so I had tried to apply this concept to the realm of money which is as you as you can see from the that like previous triad that I showed you um is maybe another form of doing abolitionism by actually tackling the monetary part you can actually potentially also abolish these other systems.

So but why what is the justification for my argument? Why do we need to abolish the US dollar? So the first one uh and I already alluded to it uh is based on energy and ecological uh arguments. So today's production system and labor are structurally controlled by this oil money nexus. uh so far as you know in so far as we have technical alternatives with different energy technologies such as solar or wind that are actually more effective and costefficient they will not thrive because structurally speaking if you look at the distribution of investments that banks today do when they fund uh projects uh they mostly fund non-renewable energy projects in comparison to renewables like there is a very good uh piece by this in bank track

which is a the Dutch a Dutch entity that looks at how banks uh do investments and if structurally speaking because of this uh military coinage uh complex of of of of the USA there isn't really uh any like incentive for banks to go outside of that nexus right so while we do have the alternatives and while there are countries developing technologies there structurally we still are yet to be able to make that transition uh and the other thing is that of course we cannot have infinite debt infinite growth of debt in a finite planet. Why? Because debt is really the driver of what people now are calling economic growth as in the e the expansion the expansionary extractive uh

way in which resources are taken from the earth uh also labor uh and many other things. So if we uh imagine it as like a way in which the US has this infinite deficit that they can just you know keep printing money and printing money that translates into climate change in the form of more fossil fuels and more extractivism right it doesn't mean that we don't need production it doesn't mean that we don't need you know uh supplies to produce things but the way that that that is structurally made today is such to fuel consumerism and the production of you know fast uh commodities right that perish fast. Um the second argument is actually on the grounds of economic democracy. For me, the abolition of the dollar is a means

towards achieving economic democracy. And so today, some of us uh are lucky enough to live in systems that are that are sort of more or less politically democratic. So people get to choose their leaders every four years. Of course, we shouldn't confuse voting with democracy, but it is way better than dictatorial regimes or plutoaucratic regimes, which we unfortunately have in the crypto world. Um so economic democracy is something that we really don't have. People don't really get to own or control the means of production at a you know local level. Uh and so for me abolishing the dollar is a step in that direction because it will allow us to first cancel debt all these imperialist debts I mentioned with the IMF and the World Bank. Um if countries

could be released from this servicing they could then use that wealth to fund other things basic infrastructure basic services and also I argue a planetary but local first basic income circles was an attempt that I tried to do this in practice have many critiques of it but at the same time I think that direction of thought is definitely worthwhile exploring because we live in a planetary system at this point so we have to think about global solutions to local solutions to global problems. Um so what's the role of crypto in the fall of the dollar? So the story so far right uh Trump actually the Trump administration funnily enough has this weird twoprong seemingly contradictory

strategy where they both want to devalue the dollar while maintaining its global dominance. No, this whole argument about bringing production back into the US and making America great again is based on this type of arguments. And one of the weapons that Trump has in his uh uh in his pocket to do this is tariffs, right? Which we've seen him use in very strange ways as a form of so-cal economic protectionism, even though it's not really the historical form of economic protectionism that we see in nation states. But the other aspect of this is crypto.

So you could think about this as a promisory time bomb. You know the history of money is filled with uh broken promises particularly in the sense of convertability. Uh so as I mentioned during the end of the gold standard and before that there were always these moments where uh people states couldn't hold the promise of a specific regime and then they had to transition out of them. Right? This is what we what I think is happening uh with the dollar today. And so by accepting Bitcoin and USD stable coins, these retail stable coins as legitimate reserves, there's actually a very funny website in the White House which is like a fact-checking of all this. You can check it out. It's very interesting. Uh what Trump is actually doing is

accelerating systemic risk by coupling assets, volatile assets like Bitcoin to the rest of the economy. So whenever there is a shock to the system and in the level of this is speculative markets that will eventually impact all the other sectors. So we see this rising systemic risk. So Trump wants to leverage this his agenda is to leverage stable coins to get other countries to invest their dollars. Say Japan who holds trillions of dollars into the US by telling them by saying that you know to them that oh the Fed will accept uh stable coins now. So please take your dollars transform into crypto dollars and give them give them to us. Right?

This is their uh strategy it seems. So, but the problem is of course that this retail USD crypto stable coins cannot be fully regulated or controlled by the Fed, right? So, if you look at it historically like today most of uh money creation happens through not state money like the Fed but actually bank money. So, banks create most of the dollars in existence through debt. And now this is uh becoming even more spread out as these retail companies like Tether and Goldman Sachs and others start to issue their own private US dollars. Right? So that means that the control that the state has over the money supply is weakening over time. Uh and so has anyone seen Tether's reserves?

No. Right. So there is a big controversies about this. So when the convertibility fails, the promise of the daughter will break. And so, ironically, Trump is likely our biggest ally in toppling down the US monetary imperialism. If you think about it, it's kind of funny because a Democrat will never be able to get away with it. You, you know, it's only a right-wing nationalist uh uh populist person that can actually get away with it, which is sort of weird, but hey, that's how the US works. Uh the dollar is already on its way down. Uh so it's not a matter of if the dollar will fall but when how and what can we do about it. So one question I pose to you uh is how can we preempt

Trump's top down strategy with a more bottomup approach to deal the fatal blow to the dollar and actually have a self-determined transition which we deeply need. So here I have some uh US dollar abolitionist skybook. I will only focus on the first part since it's about monetary sabotage and you're all uh hackers and cryptographers. So I'm I'm wondering to think with you about these questions. Um so the first type of monetary sabotage is about counterfeiting.

Counterfeiting has been used historically by states to uh basically do forms of economic sabotage on each other. Uh the British did it to the to the to the US government when it first started within the US civil war. the north was counterfeiting the grayback which was the name of the currency of the south but also anarchists have been doing this. So Lucio Urbia is a famous Spanish anarchist who counterfeited many uh city bank checks in the 70s that almost led to the fall of city bank and they chose bank uh traveler checks because the the fine on it was less than actually counterfeiting US dollars. Um then but but actually more in more

recent history there isn't this interesting case that happened when at the dawn of Donald Trump's second election the Chinese government uh created a financial product uh that is was effectively a US treasury bill made in China and they sold it to the Saudi government. So now the Saudis have the option to exit and say the dollars that we get from oil instead of recycling them to the war machine to the US we can give them to China. And so the question I have is can we do the same in the crypto world? Could we make cryptoe equivalent US treasury bonds?

Second method uh is what I call shorting the dollar. Now in the 19 1990s I think it was uh the infamous uh George Soros did a huge trade where he basically devalued the price of uh the pound uh gaining him millions billions of of pounds at the expense of basically everyone over. So he won a lot of enemies not just the elite but also many working-class people. So my question here is how could we short the dollar in a way where we can think about uh we could think about it in a class conscious way. So if we short the dollar and the dollar falls, how could that money be used to redistribute uh the to the to the people that are actually suffering the most from the from the

growing inflation that we see today? The third one is uh DOS the dollar. Who here knows what DOS is? Can you please spell it out for me? And what does what does that do? Exactly. So if we were to dodos the dollar, I think this is more of a like a timebased type of side channel attack in the sense that you could dodos the dollar the service the dollar institutional service in moments where it really matters. So for example, the US uh the Federal Reserve of the United States has what they call swap lines

which are credit lines to other central banks and they give them liquidity in times of crisis particularly in the corona crisis but in in moments when they critically need money uh the swap lines are activated. So these are I think attacks that we can do at specific moments to deal like to borrow from Chinese medicine you know uh points at the right uh part of the body so that we can actually change uh the way things are going. Now an anarchist cyber natician friend of mine uh actually posed this next method to me and I thought it was quite nice which is to make organized uh tax and payment strikes for the dollar. So this is a method that anyone can actually do that lives in the US for example they can say today we will not accept payment in dollars and we will not pay in dollars

or we will not use our money to pay taxes in dollars because it funds the war machine. Uh we can instead use it to for other things. So this is a form of organized strikes that have been done throughout history uh but at the level of the money system at the level of payments on the level of paying taxes. I think tax resistance is the term that people use for it in the US. Um the fifth one relates a little bit to a protocol that I had the luck to work on it a bit called cycles which is more about cancelling trade debt. So all countries in the world have uh surplus and deficit accounts with one another as they do trade. Uh and a lot of that is denominated in dollars. The the dollar is I think it's 85% of world trade is denominated in dollars. So if you could

look at those relationships in a graph and you can look at the cycles within that and the world trade, you could actually cancel a lot of the world debt that we have just by the mere act of doing uh mathematics. So that is a very simple way in which you could already weaken a lot the power of the dollar by cancelelling a lot of the debt that is already inherent within the graph within the system. Um and so on and so on and so on. So I don't intend to give you a complete list of all the methods. is a work in progress and it's just to get people thinking about uh in this direction. So um so just just to end on like some of uh poetic explorations into the future of crypto, you've all probably heard about circles. Circles is

a peer-to-peer uh uh protocol that allows people the power to issue their own money in the form of a personal ERC20 token beyond states and banks. Now you know there's many problems with circles. as many critiques uh I have about it like we mentioned it during the day there is no privacy uh and and so on and so on uh but I think it's a good uh way to get us thinking in the direction of what would it take to claim and democratize the power to issue money away from states and banks and into the realm of the commons into the realm of people. The second thing has to do with democratizing the power to destroy money here specifically I mean it in the form of cancelling debt. So as I mentioned in

the example before of cancelelling trade debt, this next protocol cycles by informal systems led by the great Ethan Bookman is an open credit creating protocol where the goal is to cancel the most amount of debt with the least amount of money in a privacy preserving way which is I think it's a very nice innovation. Um some of some of the other work uh that I've been thinking about recently is to make a quantum like money system using physical and clonable functions or puffs uh which I won't get into the history of that because it's very geeky right now but anyways the and and then also money systems in general that are offline first and local first hedging for internet collapse. So how could we make monetary systems using the cryptographic primitives that we have

today so that you can do payments that are like cash uh without having to rely on the hegemonic internet infrastructure. So thank you. This is my context on signal telegram and my email. Please pre-order my book. This is you can scan there the code and my book comes out in early spring next year. So yeah, uh feel free to contact me if you want to hang out, if you want to invest in poetic or if you just want to collaborate and abolish the dollar together. Thank you. A few questions to Julio.

Who who want to go with a question to? Yeah. Well, I will just improvise. Um I also don't like the dollar and I thought a in the last years how to basically obuscate also paying taxes in my country in Italy because I saw clearly how much all this money is used for something that I'm not like resonating with um and I personally didn't understood clearly uh the DOS attack on the dollar uh but always keep like trying to understand how to again uh push down this because I see this very clearly in my everyday life how much the dollar is there always beging

everything. I mean coming from Italy is easy because you know we have a pretty relationship with that country. Um yeah so first of all the dox I didn't understood and how do you feel uh I think for Italians personally is a lot also about culture like how all this money and and and and and the culture flooded into our our our culture and this is not easy to to detach from because actually even if I use euro is the same thing at the end so Yeah, it's a great question. So, um I think generally speaking, uh one takeaway I would like you to get from

this talk is that what we should be doing with all these methods is to destroy the trust that people have in the dollar which as I said Trump is already helping us to do. Uh but we can do more you know uh when it comes to the DOS attacks um as Cassandra mentioned basically you can think about it as like imagine everyone in this room or everyone in the conference starts to send requests to the servers that control the the the databases of the dollar where you flood them and then they just break because they cannot be you know uh they cannot handle so many requests at once. So that is a it's a it's a cybernetic attack. It's not a physical attack. Yeah.

One, we have one minute more for a question. Yeah. Actually, not a question, but a remark to your US dollar abolitionist list. I would add the climate change or the reuse of of fossil fuels on that list. Yeah. If we don't buy that much oil and gas will also be valid point to reduce the dominance of the dollar. You mean like divestment from fossil fuels? Yeah. Yeah. Of course.

Are you here? Yeah. Um maybe one thing that you have already mentioned is uh debt cancellation and I'm wondering I'd love to hear your perspective on what do you think we can all do when it comes to debt cancelling also in our own private lives not buying into this you know notion of debt as we grew up with but how can we reframe that for ourselves and how can we start cancelelling debt yeah so for example there is a very nice collective in the United States called the debt collective uh and what they've done is that they managed to organize debtors the debtor classes if you want to organize and strike against their creditors. So you can do that at the bank level. It depends on the structure

that we're dealing with but definitely organizing within the detors uh unions or whatever you want to call them. It's a way to start because a loan it's hard to fight a bank but if you owe the bank a thousand a million dollars the bank owes you but if you owe the bank a thousand a million dollars you own the bank right? So it's uh it's about the power dynamics. There was a question there. I don't know if there's running out of time. You can ask me later.