Crypto News
National Emergency: Executive Order 6102 and the Heist of the Century

Introduction
Ninety-one years ago today, President Franklin D. Roosevelt pulled off the greatest heist in American history.
Unlike most robberies, this one was entirely legal. No safe-cracking was required; no ski masks, guns, or getaway cars. Just a pen and some White House letterhead.
On April 5 1933, FDR issued Executive Order 6102, making it illegal for anyone in the United States to own gold. By penalty of up to a $10,000 fine or 10 years in prison, everyone in the country was ordered to turn in their gold to the government, by the end of the month.1
EO 6102 is one of the most important milestones in the history of money. Book-ended by the creation of the Federal Reserve in 1913, and the end of the Bretton Woods system in 1971, it was a pivotal part of the process by which the USA abandoned gold for a fiat standard.
As such, it’s a milestone in Bitcoin history too. Though Bitcoiners’ interest in EO 6102 extends beyond the merely historical: because it’s the quintessential cautionary tale of arbitrary government seizure of personal property, it’s also one of the best real case studies to illustrate the value of Bitcoin self-custody.
Realizing that the government is not your friend is like learning that Santa Claus isn’t real. A necessary part of growing up, but a potentially traumatic fact that needs to be introduced to children carefully.
Nonetheless, adulthood requires coming to grips with the fact that there’s no jolly fat man coming down the chimney with gifts in hand. In the real world, the strange fat man wears a frown and comes through your front door with an arrest warrant if you don’t pay your taxes.
For many people, the story of Executive Order 6102 brings them into collision with this reality. It teaches us that the United States Government has not hesitated to brazenly confiscate its citizens’ wealth at the barrel of a gun, and under the right circumstances would absolutely do it again.
However, most discussion of 6102 focuses on why FDR did it and whether it was justified. This debate is framed around FDR’s overall handling of the Great Depression. On one side you have (essentially) FDR hagiography which says that he was an unmitigated American hero; that “without his New Deal, we would all have been lost.”2
On the other side, you have the (somewhat milquetoast) Republican criticism which says, well maybe FDR went too far, or maybe he actually hurt the economy as much as he helped it. Sometimes a spicy Libertarian will get hot under the collar and tell you FDR sent America down the path to welfare-statism and “accustomed Americans to the pernicious dole.”3
All of this misses the most important lesson from EO 6102, which is how FDR pulled the whole thing off. I mean, technically. Legally.
This is because, despite the fact that FDR’s Presidency could justifiably be characterized as a quasi-dictatorship and, in the words of America’s foremost FDR disrespector Curtis Yarvin (aka Mencius Moldbug), “rule by personal decree”4, there were specific legal precedents and tools of executive power that he relied on to make EO 6102 kosher.
This legality (fig leaf for tyranny as it may have been), is crucially important to understand. It was one of the foundational steps in codifying what would go on to become a technique for abusing Americans’ rights favored by almost every President, and has been implemented literally dozens of times in the decades since.
If we have any hope of putting a stop to it, we must first learn to see it from a distance, and then stomp it out preemptively.
The Use and Abuse of the National Emergency
“Now, in a well-ordered republic it should never be necessary to resort to extra-constitutional measures; for although they may for the time be beneficial, yet the precedent is pernicious, for if the practice is once established of disregarding the laws for good objects, they will in a little while be disregarded under that pretext for evil purposes”
– Machiavelli, The Prince and the Discourses
I’m not sure anyone’s ever said that the conduct of American Presidents has on the whole not been Machiavellian enough, but in this case the historical record is clear.
Dating back at least to Abraham Lincoln’s suspension of habeas corpus in 1862 (so he could lock people up without trial during the Civil War), ‘disregarding the laws for good objects’ has been practically a job requirement of the oval office.
Carl Schmitt said that “Sovereign is he who decides on the exception.” Every US President since Lincoln has made absolutely sure, when necessary, to create and exploit ‘extra-constitutional’ exceptions for their own ends. In Schmitt’s case, well, you can Google him to see how he put principle into practice.
In order to manufacture these exceptions in America, Presidents have almost always resorted to the incantation of a particular phrase, which reliably summons the special powers they seek. Much like coaxing a genie from a lamp.
The phrase is “national emergency”. Likely, it is familiar to you. If you’re an American adult, it’s been invoked in your lifetime to help grease the skids for a colorful variety of constitutionally suspect legislation, from the ‘anti-terrorism’ provisions of the Patriot Act to the public health emergency measures of Covid-19.
In fact, it’s such a mainstay of the government toolkit that use of the ‘national emergency’ has been officially sanctioned since the The 1976 National Emergencies Act. Since that date, 82 such emergencies have been declared, and 42 are still in effect today.5
Source: https://en.wikipedia.org/wiki/List_of_national_emergencies_in_the_United_States
To give you a sense of the temporal nature of these ‘emergencies’, there are still in effect: 9 from the Obama administration, 10 from Bush II, 5 from Clinton, and even one from Jimmy Carter in 1979!
This is what Milton Friedman was talking about when he said “Nothing is so permanent as a temporary government program.”
This is also the story of Executive Order 6102, for it too sprouted from an official national emergency.
You can read this in order itself, where FDR states in the preamble: “I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist…”
Executive Order 6102, 5 April 1933
But still, the story goes deeper. It’s not just enough to declare a national emergency and then do whatever you want. That certainly wasn’t the case in 1933.
So what was FDR’s national emergency? What on earth could legally justify the seizure of all American gold?
The short answer is the Great Depression and looming financial crises in 1933. But in order to really understand the twisted history of national emergencies, we have to go back another 120 years first.
The Beginning: Principled Piracy
In 1812, the United States was at war with Great Britain. Prior to the war, an American citizen Jabez Harrison purchased some goods in England and stashed them on an island off the coast of the United States, near Nova Scotia.
About a month after the war broke out, Harrison chartered a boat, the Rapid, to retrieve the cargo and bring it to the mainland. While en route, it was captured by an American privateer called the Jefferson, who claimed the ship’s goods as a prize.
Harrison felt, as you might expect, pretty aggrieved by this and sued the owner of the Jefferson. Unhappily for Harrison, he did not win back his cargo.
The law was clear and unambiguous according to Supreme Court Justice William Johnson: under the well established rules of war, Harrison was “trading with the enemy”, and therefore everything he had acquired from said enemy was essentially up for grabs for the government.6
Thus the seed was planted in American law: if you trade with an enemy during war time, expect a visit from Uncle Sam with his hand out. This, believe it or not, is the legal foundation for Executive Order 6102.
“But”, (I hear you interject), “By what definition could an ‘American with gold’ be reasonably classed as an enemy of the state? And besides, there wasn’t even a war in 1933!” Fantastic points, and you’re right to make them.
To preface the answer, let’s first take a detour into some high level American jurisprudence. In the murky but politically charged arena of Constitutional interpretation, there are several major ‘philosophies’ that you might subscribe to.
Because the Constitution was written a long time ago, we need to find a way to apply it to the present day. Where, for example, we might have new technologies or social problems today that didn’t exist when the Constitution was written (like e.g. social media, or automatic rifles, or abortion pills). In such cases, these ‘philosophies’ help judges decide the ‘right’ way of interpreting the Constitution (which also usually aligns with their personal political views, but that’s another story).
If you woke up tomorrow as a Supreme Court Justice and needed a cheat sheet to help you crack a tough Constitutional nut, here are the main schools of interpretation you might rely on: 1) Textualism: where you focus on the ‘meaning’ of the law at the time, 2) Originalism: where you focus on what the framers actually intended, or 3) A ‘Living Constitution’ approach: where you basically say, ‘to hell with that old rag, we should just update it according to the demands of today’.
The third approach is more or less how the law around ‘national emergencies’ has evolved. And not, like, a slow and deliberate ‘natural selection’ evolution either. More like a Frankensteinian chimera lab rat fed plutonium for breakfast.
So, what began as a recognition of the simple idea that doing business with enemies during a war is bad and the government can stop it, eventually mutated into FDR seizing the gold.
Now let’s fill in the gaps and show how that happened.
1917: National Emergencies Go Up
There are some great contenders for Worst Year Ever in the history of abuses of individual rights in America. 1917 might be in the top five.
One piece of legislation passed in 1917, the Espionage Act, was of such fine vintage that its ability to justify obscene government overreach is still being put to good use today.
This package of laws was passed to, more or less, enable the government to do whatever it wanted, to anyone, who got in the way of its efforts to prosecute WWI. More than a century later, this would be the law which both Julian Assange and Edward Snowden were criminally charged under.
1917 was also the first time the phrase “national emergency” passed into the formal language of the Presidency. Invoked by Woodrow Wilson first in his Proclamation 1354, the emergency at hand was that there were apparently not enough boats to ship out all of America’s exports to customers around the world. As a result, Wilson gave the Shipping Board the power to control the sale and use of freight ships in America.7 Leasing your cargo ship to foreign interests? You just did a heckin’ violation.
This would not be the last national emergency of 1917, however. After America declared war on Germany on April 6, the administration now had a number of new problems to deal with.
Aside from fighting the war itself, there was the issue of what to do with all the German business interests in America, and vice-versa. In the years since The Rapid, global trade and commerce had advanced substantially. Now, there was a vast web of commercial relationships between America and its new enemy, which would take quite a bit of effort to disentangle.
The solution was the Trading with the Enemy Act, which brought the principle of The Rapid into legislation and vastly expanded it. The official purpose of the TWEA was to “define, regulate, and punish trading with the enemy.”8 In practice, the goal was twofold: to confiscate German resources for the benefit of the US war effort, and to prevent Germany from doing the converse.9
Democratic Congressman Andrew Montague argued in favor of the Bill by saying, “perhaps in no former war was trade ever so potential a weapon in the hands of a belligerent as in the present conflict. This is not a war of soldiers so much as a war of economic forces.”10 This, three years into a war that had already cost many millions of lives.
For obvious reasons, history has largely forgotten what German businesses and civilians endured in America for the rest of the war. Estimates are that 6000 men were sent to internment camps, and around half a billion dollars in assets permanently confiscated.11
Source: New York Herald on March 28, 1918, https://www.smithsonianmag.com/history/us-confiscated-half-billion-dollars-private-property-during-wwi-180952144/
This was all authorized by the Trading with the Enemy Act. One section of it in particular, however, would go on to be the lynchpin in the Executive Order 6102 story.
That was Section 5b, which gave the President complete power to investigate, regulate, or prohibit any transactions dealing in “foreign exchange”, or by any foreign country.12
You might sense now that we’re getting warmer. The TWEA power is evolving, and EO 6102 beginning to take shape, gradually getting clearer like a shadowy apparition emerging from the darkness.
But we’re not there yet. There was one more hurdle to get over, for the President’s power in 1917 was still limited to “during the time of war.”13
It would take another catastrophe more urgent even than World War One to get over it.
Great Depression: FDR’s Opportunity
That catastrophe would come in 1933, following four years of unimaginable suffering during the Great Depression and a quickly spiraling financial crisis.
Three days before FDR was inaugurated, on 1 March 1933, the head of the New York Federal Reserve branch, George Harrison, was in panic mode. The bank’s gold reserve had fallen below the legal limit. Harrison sent a memo to Washington saying that he would “no longer take responsibility” for the bank’s “deficient reserves”.14
What was going on?
Well, in 1913 when the Federal Reserve was created, a ‘gold standard’ was built into its framework. The Fed was required to hold gold equal to 40 percent of the value of the dollars it issued, and to convert those dollars into gold at a fixed price.15
The problem was, the US was in the middle of a deflationary crisis. The economy had been going backward for years. Gradually then suddenly, people began to seek the safety of gold, and withdraw it from banks all over the country.
However, there was one big problem: there was simply not enough gold. As FDR would admit publicly a couple of months later, the government’s debts amounted to $30 billion in gold, and private gold-denominated debt totaled another $60-70B.
Meanwhile, “all of the gold in the United States amounted to only between three and four billions and that all of the gold in all of the world amounted to only about eleven billions.”16
FDR’s interpretation of the moment is recorded in his inaugural address. He used the speech to wage a broad attack against the excesses of capitalism which he (and history) would scapegoat for causing the 1929 and Great Depression.
He called out the “unscrupulous money changers”, and the “falsity of material wealth”, and demanded that “there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people’s money, and there must be provision for an adequate but sound currency.”17
Now, if you’ve been paying attention, you shouldn’t be surprised by what he said next. Yes – it was indeed a national emergency. One so severe that it required a “broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.”18
It was all downhill from there.
Two days after FDR’s term began, he took action to stop the gold run by simply closing the banks. The March 6 Proclamation 2039 instituted a ‘Bank Holiday’ from 6-9 March, outlawing any withdrawal of gold, to stop the “hoarding”.19
Stopping the run wasn’t enough, though. Hoarders were now enemies of the State, and the Fed wanted names. On March 8, the St. Louis Fed sent a memo to member banks, requesting “the names and addresses of all persons who have withdrawn gold from your bank since February 1, 1933.”20
On March 9 1933, Congress passed the Emergency Banking Relief Act, granting FDR almost full personal control over the entire banking system. It gave him authority to regulate “any transactions in foreign exchange, transfers of credit between or payments by banking institutions as defined by the President, and export, hoarding, melting, or earmarking of gold or silver coin.”21
Now, here is our link back to 1917. As we mentioned earlier, the Trading with the Enemy Act restricted this power to war time operations. But as was foreshadowed in FDR’s inaugural address, the Emergency Banking Act (EBA) would help FDR get past this technicality.
Specifically, it amended the TWEA to ensure that FDR had the power to regulate commerce “during time of war”, or crucially, “during any other period of national emergency declared by the President.”
FDR had his crisis, and now he had his emergency powers. A couple of weeks after the passage of the EBA he would issue Executive Order 6102, and then the job was mostly done.
By and large, everyone complied. The day after the Order, the New York Times ran an article on the front page with the headline: “HOARDERS IN FRIGHT TURN IN $30,000,000; Gold Pours Into Banks and the Federal Reserve as Owners Act to Avoid Penalty”22
This brings us to the end of the story. From The Rapid, to the Trading with the Enemy Act, to the Emergency Banking Act, to Executive Order 6102.
The evolution was complete, and enshrined the national emergency exception into Presidential powers from then on. Natural disasters, foreign wars, domestic wars, public health emergencies.
This is the story of two hundred years of Presidential power. The law is the law, until it isn’t.
Conclusion: Could It Happen Again?
Ultimately, this is really what everyone should ask about EO 6102. Could it happen again? Could some unholy triumvirate of the Fed, Treasury Department, and Elizabeth Warren channel the spirit of FDR and attempt a mass seizure of Bitcoin?
Nobody can really know, but the best way I can answer the question is with the help of the trusty Midwit meme (see below), which gives us three ways of predicting the likely outcomes.
The Left Curve answer is to do a basic pattern match between 1933 and today. People had money the government couldn’t control; Government wasn’t happy; Government stole the money. No more analysis required: the Feds will steal your stuff.
The Midwit answer is to carefully compare and contrast the nature of Gold with respect to the American economy of April 1933, versus Bitcoin and today, and to distinguish between the ruthlessly efficient dictatorial powers of FDR and the bungling and incompetent bureaucratic oligarchy of 2024.
This isn’t exactly wrong, as the Midwit never quite is. The particular problem for the government in 1933 was that almost every commercial contract in the country was backed by gold, as was the dollar, and a breakneck run on Gold was threatening to implode the economy. None of these things is true about Bitcoin. But the Midwit is never quite right either.
The Right Curve answer (if I may humbly submit), is presented in this essay. The meaning of the Executive Order 6102 story is not in the exactness of the analogy from Gold in 1933 to Bitcoin in 2024.
Rather, it is the nature of the legal power wielded by FDR to expropriate the property of American citizens, the ubiquity and breadth of its use by every President since, and the likelihood of it being used again in the future.
History has shown that the invocation of national emergencies has, time and time again, given the United States government almost unlimited capacity to encroach on civil liberties.
What does the next national emergency look like?
A mass flight to safety from the US dollar into the hardest asset ever known? Could 175T of unfunded liabilities23 trigger a catastrophic restructuring of American debt? Or perhaps another hot war or three?
We don’t know what the crisis will be; only that there will be one. As the state debases the currency at an accelerating rate, and its liabilities balloon out of control, it will get desperate.
In late-stage Fiat, just as in the Kingdom of Alice in Wonderland’s Red Queen, the state must run faster and faster just to stay in the same place. And when the moment of crisis comes, the Right Curve prediction is simple: the Feds will steal your stuff.
Only this time, it might be different. For the first time, sovereign custody of Bitcoin has a chance at keeping private wealth safe from public expropriation.
So to conclude, the lesson as always is: not your keys, not your coins.
And see you in hell, FDR.
Sources:
1 Executive Order 6102, https://en.wikisource.org/wiki/Executive_Order_6102
2 Shlaes, Amity, The Forgotten Man, Introduction
3 Shlaes, Amity, The Forgotten Man, Introduction
4 Mencius Moldbug, March 19 2010, The true election: a practical option for political change, https://www.unqualified-reservations.org/2010/03/true-election-practical-option-for-real/
5 List of national emergencies in the United States, https://en.wikipedia.org/wiki/List_of_national_emergencies_in_the_United_States
6 The Rapid, 12 U.S. 155 (1814), https://supreme.justia.com/cases/federal/us/12/155/
7 Proclamation 1354, https://www.presidency.ucsb.edu/documents/proclamation-1354-emergency-water-transportation-the-united-states
8 Trading with the Enemy Act of 1917, https://en.wikipedia.org/wiki/Trading_with_the_Enemy_Act_of_1917
9 The Secret Life of Statutes: A Century of the Trading with the Enemy Act, https://www.cambridge.org/core/journals/modern-american-history/article/secret-life-of-statutes-a-century-of-the-trading-with-the-enemy-act/77DD7CF528D3190CFC8CF8FF6DDAACB0#fn68
10 Congressional Record — House, July 9 1917, 4842, https://www.congress.gov/bound-congressional-record/1917/07/09/house-section
11 The U.S. Confiscated Half a Billion Dollars in Private Property During WWI, https://www.smithsonianmag.com/history/us-confiscated-half-billion-dollars-private-property-during-wwi-180952144/
12 Trading with the Enemy Act 1917, https://www.govinfo.gov/content/pkg/USCODE-2011-title50/pdf/USCODE-2011-title50-app-tradingwi.pdf
13 Trading with the Enemy Act 1917, https://www.govinfo.gov/content/pkg/USCODE-2011-title50/pdf/USCODE-2011-title50-app-tradingwi.pdf
14 Bank Holiday of 1933, https://www.federalreservehistory.org/essays/bank-holiday-of-1933
15 ‘Roosevelt’s Gold Program’, https://www.federalreservehistory.org/essays/roosevelts-gold-program
16 FDR’s Second Fireside Chat, https://millercenter.org/the-presidency/presidential-speeches/may-7-1933-fireside-chat-2-progress-during-first-two-months
17 First Inaugural Address of Franklin D. Roosevelt, https://avalon.law.yale.edu/20th_century/froos1.asp
18 First Inaugural Address of Franklin D. Roosevelt, https://avalon.law.yale.edu/20th_century/froos1.asp
19 Proclamation 2039, https://en.wikisource.org/wiki/Proclamation_2039
20 Federal Reserve Bank of St. Louis, https://fraser.stlouisfed.org/title/banking-holiday-1933-486/member-banks-addressed-18942
21 Emergency Banking Relief Act, https://en.wikisource.org/wiki/Emergency_Banking_Relief_Act
22 New York Times, https://www.nytimes.com/1933/03/10/archives/hoarders-in-fright-turn-in-30000000-gold-pours-into-banks-and-the.html
23 Medicare and Social Security face $175 trillion shortfall, risking future generations, https://abc3340.com/news/nation-world/medicare-and-social-security-face-175-trillion-shortfall-risking-future-generations-treasury-department-inflation-economy
This is a guest post by Julian Fahrer. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
A comprehensive history of the events leading up to the historic Executive Order 6102 under FDR that led to widespread gold confiscation in the United States.
Crypto News
Bitcoin Banks: We Should Build Them Ourselves

Bitcoin banks are going to happen. We already have a few of them. We’re going to have more of them. Existing legacy banks are going to start offering services. New banks are going to be founded around Bitcoin. This is completely unavoidable at this point. Bitcoin doesn’t scale. Even absent that, people value other services that inherently require other parties. Debt being the chief one.
This is an inescapable reality.
Even if we could snap our fingers and roll out every well specified opcode and covenant proposal at once, it would still take a lot of time to begin building out self-custodial layers that could compete with something like credit unions and banks offering bitcoin accounts at scale. That is not a problem that can be trivially solved overnight.
So what can we do? We need to embrace a localist attitude around making interaction with your bitcoin easy. This requires a two pronged approach, one involving technical development and the other involving, I hate to say it, lobbying.
There already exist pieces of software like LNDHub or LNBits that allow people to offer custodial accounts for Lightning. We need a lot more software like this, and we need it to be miles better. It needs to not involve tinkering around on the command line and hooking up independent software, or perusing Github to follow manual installation instructions, or fumbling around trying to fix dependencies mismatches.
It needs to just work.
Click, sync to the network, done. It needs to be something that power users who are still not very tech savvy can run safely, and not lose other people’s money. It needs to support more than basic accounts for Lightning. Ecash offers privacy, which would be something important when it comes to small groups of people who know each other. You don’t want your friend seeing what you spend your money on. It needs to support things like Unchained or Nunchuck style on-chain self custody. People aren’t going to want to hold all their friends and family’s life savings, but holding a recovery key to safeguard them from their own mistakes is another matter.
We need the software that will actually scale this type of user interaction beyond a bunch of activist nerds online.
We also need a regulatory carve out. There needs to be a clear acknowledgement that running this type of software for friends and family with trivial amounts of money, say thousands of dollars, and without charging anything for it, is an unregulated activity. Helping friends and family interact with Bitcoin safely and easily, and for free, does not make you a bank. The idea of a few thousand dollars needing to comply with the regulations banks managing billions of dollars do is frankly absurd.
This is the path forward given the current constraints of Bitcoin, and the reality of growing and accelerating adoption, that leads us away from a system that eventually becomes completely captured and neutered by legacy financial institutions.
Instead of depending on them to deal with the current scaling limitations of Bitcoin, we depend on each other.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Bitcoiners shouldn’t sit around and wait for fiat banks and financial companies to offer services built on Bitcoin, we should do it ourselves.
Crypto News
Galoy Launches Bitcoin-Backed Loan Software, Sets Groundwork For Open-Source Banking

Founder: Nicolas Burtey
Date Founded: September 2019
Location of Headquarters: United States
Number of Employees: 11
Website: https://www.galoy.io/
Public or Private? Private
Last week, Galoy launched Lana, software that enables banks to accept bitcoin as collateral for loans.
Lana helps community and challenger banks (the banks with which Galoy is looking to work) to offer bitcoin-backed loans to various types of customers.
“Some banks might want to use it to sell to retail, and some might want to use it to sell commercial customers or high-net-worth individuals,” Burtey told Bitcoin Magazine.
In offering such loans to a wide array of customers, Burtey believes that the high cost of borrowing currently associated with such products will come down.
“Today’s interest rates are 12% to 15% if you want to get a loan using your bitcoin as collateral,” said Burtey.
“The rates are high because there are so few financial institutions offering this type of product. We see an opportunity now that the regulations are allowing banks to do things with bitcoin,” he added.
“We think a lot of banks will want to enter this market.”
If Burtey is correct in his prediction that banks are keen to offer bitcoin-backed loans, this will not only lower rates for such loans, but it will also introduce open-source Bitcoin software into the world of banking, which could initiate a new trend in the industry.
But more on that in just a minute. First, some background on Galoy.
Galoy’s History: From Blink Wallet To Lana
Founded in September 2019, Galoy had intentions to enable banks to use bitcoin from the start, but it had to hold off on doing so due to an unfriendly regulatory environment.
So, instead, it focused its efforts on creating and supporting Blink wallet (which was originally called the Bitcoin Beach wallet and which Galoy recently sold), a custodial Bitcoin and Lightning wallet predominantly used at first in El Salvador and then in Bitcoin circular economies globally.
“Galoy’s mission was to onboard banks to Bitcoin five years ago,” said Burtey.
“But the regulatory environment was so bad during the last five years that we decided to create Blink. The reason we are now focusing on our original mission is because with the end of Choke Point 2.0 and the repeal of SAB 121, we think now is the perfect time to help banks adopt Bitcoin.”
Burtey spoke about his work in creating and growing Blink fondly and shared that he had to stop working on the project only because it would be too difficult to continue managing it while also aiming to serve a new type of clientele.
“Blink is a B2C (Business-To-Customer) play, and it’s hard as an early-stage startup to focus on too many things,” explained Burtey.
“Galoy is a B2B (Business-To-Business)-driven business, and we want to work with banks and financial institutions,” he added.
“It’s good to be focused on just one thing.”
And, as mentioned, that one thing will now be Lana.
How Lana Works
Lana is software that Galoy helps banks integrate and manage for a subscription fee. With this software, banks can issue bitcoin-backed loans under the terms they create.
“We’re not the ones deciding how much interest will be charged or anything like that,” explained Burtey.
“We give banks the platform to do this, and then they can figure out their cost of capital, the duration of the loan, the liquidation price for the bitcoin in the loan and the rate at which they want to lend,” he added.
“We’re giving you software, and helping you run and automate that software.”
Something else that Galoy doesn’t do for banks is custody the bitcoin provided as collateral for the loans they issue. Each of the banks with whom the company works is responsible for selecting their own custodian.
“You can go to BitGo or Fireblocks or each loan can have its own multisig,” said Burtey. “We’re agnostic on custody.”
With that said, Lana helps banks monitor the bitcoin in custody so that banks can be aware of whether or not collateral is nearing liquidation levels.
“A key piece of this product is risk management,” said Burtey.
“Bitcoin is volatile, and the bank will need a tool to show that it’s taking calculated risk. So, we’ll provide banks with a dashboard to monitor this risk,” he added.
Who Will Use Lana?
Galoy is targeting community banks and other smaller financial institutions with this new product mostly because they think these smaller players will benefit most from it — and because the big banks likely won’t need such a product.
“We don’t think JP Morgan will really want to work with us,” said Burtey. “They’re probably building something like this themselves, whereas a smaller bank, a credit union or small company probably isn’t.”
Burtey also understands that smaller lenders’ incorporating Lana as opposed to building something comparable themselves can save these financial institutions a significant amount of time and effort.
“Our goal is to say, ‘Look, you can develop this internally, and it will take you six months, a year or longer depending on how much you know about Bitcoin,’” said Burtey. “‘Or we have a lending product as a service for you, and you can launch it much more quickly.’”
And as Burtey and his team onboard their first round of smaller banks, they’ll not only be making history in enabling more banks to accept bitcoin as collateral for loans, but they’ll potentially be altering the trajectory of banking in general by introducing open-source software to it.
Open-Source Bitcoin Banking
Burtey’s long-term vision for Galoy is to do much more than just help banks issue bitcoin-backed loans. He’s looking to introduce open-source software into banking as more banks begin to embrace Bitcoin.
However, it’s important to note that Lana isn’t open-source just yet. It’s fair-source software, and, under such a license, code becomes open-source after two years.
“It’s a delayed open-source system, but it’s all available on GitHub,” said Burtey. “You can go and try it, test it, and play with it on your own.
Under the fair-source license, no company other than Galoy can sell the product to a bank right now, allowing Galoy to profit while still building with auditable code.
“We sell the deployment, and we help banks to plug in to their custodian,” explained Burtey. “We’re building in the open — but we also want to generate revenue.”
Beyond helping banks implement Lana, Burtey’s wants to develop open-source “core banking software,” as he’s looking to disrupt the “core ledger” oligopoly.
“The core ledger is where banks store the account data, customer information and transaction details,” said Burtey. “It’s the source of truth for banks.”
And only three companies — FIS, Fiserv and Jack Henry — have the core ledger market cornered.
“These are all like hundred billion dollar companies that you’ve probably never heard about because all they do is focus on selling software to banks,” said Burtey.
“Our long-term goal is to disrupt this industry by making something that is open source,” said Burtey. “Today, there is no company that does core banking with the idea of open source, and so we’re working towards this.”
Burtey envisions a world in which open-source software can make it much easier for someone to start a Bitcoin bank. (For those who wince at the words “Bitcoin” and “bank” being used in tandem, might I remind you that it was the legendary Hal Finney himself who wrote that bitcoin-backed banks would serve as a scaling solution.)
“To start a bank today is a very expensive and complicated process,” said Burtey. “You have to pay $100,000 plus just to purchase the core ledger technology.”
Burtey then referenced his own experience in starting Blink wallet, essentially a bitcoin bank run on open-source code, before continuing.
“I just went to El Salvador and started what was effectively my own bank because I wanted to,” said Burtey.
“We need to reinvent how core banking software is being made in the world of Bitcoin, and I think this is where open-source becomes relevant,” he added.
“This is really why I think the world of banking and Bitcoin will be very different from the world of banking with fiat, and I think we’re one of the companies at the forefront of this.”
Galoy founder and CEO Nicolas Burtey wants to help more borrowers use bitcoin as collateral for loans while introducing open-source software into the traditional banking stack.
Crypto News
The Future of Bitcoin: Scaling, Institutional Adoption, and Strategic Reserves with Rich Rines

Bitcoin’s evolution from an obscure digital currency to a global financial force has been nothing short of extraordinary. As Bitcoin enters a new era, institutions, governments, and developers are working to unlock its full potential. Matt Crosby, Bitcoin Magazine Pro’s lead market analyst, sat down with Rich Rines, contributor at Core DAO, to discuss Bitcoin’s next phase of growth, the rise of Bitcoin DeFi, and its potential as a global reserve asset. Watch the full interview here: The Future Of Bitcoin – Featuring Rich Rines
Bitcoin’s Evolution & Institutional Adoption
Rich Rines has been in the Bitcoin space since 2013, having witnessed firsthand its transformation from an experimental technology to a globally recognized financial instrument.
“By the 2017 cycle, I was pretty determined that this is what I was going to spend the rest of my career on.”
The conversation delves into Bitcoin’s growing role in institutional portfolios, with spot Bitcoin ETFs already surpassing $41 billion in inflows. Rines believes the institutionalization of Bitcoin will continue to reshape global finance, particularly with the rise of yield-generating products that appeal to Wall Street investors.
“Every asset manager in the world can now buy Bitcoin with ETFs, and that fundamentally changes the market.”
What is Core DAO?
Core DAO is an innovative blockchain ecosystem designed to enhance Bitcoin’s functionality through a proof-of-stake (PoS) mechanism. Unlike traditional Bitcoin scaling solutions, Core DAO leverages a decentralized PoS structure to improve scalability, programmability, and interoperability while maintaining Bitcoin’s security and decentralization.
At its core, Core DAO acts as a Bitcoin-aligned Layer-1 blockchain, meaning it extends Bitcoin’s capabilities without altering its base layer. This enables a range of DeFi applications, smart contracts, and staking opportunities for Bitcoin holders.
“Core is the leading Bitcoin scaling solution, and the way to think about it is really the proof-of-stake layer for Bitcoin.”
By securing 75% of the Bitcoin hash rate, Core DAO ensures that Bitcoin’s security principles remain intact while offering greater functionality for developers and users. With a growing ecosystem of over 150+ projects, Core DAO is paving the way for the next phase of Bitcoin’s financial expansion.
Core: Bitcoin’s Proof-of-Stake Layer & DeFi Expansion
One of the biggest challenges facing Bitcoin is scalability. The Bitcoin network’s high fees and slow transaction speeds make it a powerful settlement layer but limit its utility for day-to-day transactions. This is where Core DAO comes in.
“Bitcoin lacks scalability, programmability. It’s too expensive. All these things that make it a great settlement layer is exactly the reason that we need a solution like Core to extend those capabilities.”
Core DAO functions as a proof-of-stake layer for Bitcoin, allowing users to generate yield without third-party risk. It provides an ecosystem where Bitcoin holders can participate in DeFi applications without compromising on security.
“We’re going to see Bitcoin DeFi dwarf Ethereum DeFi within the next three years because Bitcoin is a superior collateral asset.”
Bitcoin as a Strategic Reserve Asset
Governments and sovereign wealth funds are beginning to view Bitcoin not as a currency but as a strategic reserve asset. The potential for a U.S. Bitcoin strategic reserve, as well as broader global adoption at the nation-state level, could create a new financial paradigm.
“People are talking about building strategic Bitcoin reserves for the first time.”
The idea of Bitcoin replacing gold as a primary store of value is becoming more tangible. Rines asserts that Bitcoin’s scarcity and decentralization make it a superior alternative to gold.
“I think within the next decade, Bitcoin will become the global reserve asset, replacing gold.”
Bitcoin Privacy: The Final Frontier
While Bitcoin is often hailed as a decentralized and censorship-resistant asset, privacy remains a significant challenge. Unlike cash transactions, Bitcoin’s public ledger exposes all transactions to anyone with access to the blockchain.
Rines believes that improving Bitcoin privacy will be a critical step in its evolution.
“I’ve wanted private Bitcoin transactions for a really long time. I’m pretty bearish on it ever happening on the base layer, but there’s potential in scaling solutions.”
While solutions like CoinJoin and the Lightning Network offer some privacy improvements, full-scale anonymity remains elusive. Core is exploring innovations that could enable confidential transactions without sacrificing Bitcoin’s security and transparency.
“On Core, we’re working with teams on potentially having confidential transactions—where you can tell that a transaction is happening, but not the amount or counterparties involved.”
As governments continue to increase scrutiny over digital financial activity, the need for enhanced Bitcoin privacy features will only grow. Whether through native protocol upgrades or second-layer solutions, the future of Bitcoin privacy remains a crucial area of development.
The Future of Bitcoin: A Trillion-Dollar Market in the Making
As the interview progresses, Rines outlines how Bitcoin’s economic framework is expanding beyond speculation and into productive financial instruments. He predicts that within a decade, Bitcoin will command a $10 trillion market cap, with DeFi applications becoming a significant portion of its economic ecosystem.
“The Bitcoin DeFi market is a trillion-dollar opportunity, and we’re just getting started.”
His perspective aligns with a broader industry trend where Bitcoin is not only used as a store of value but also as an active financial asset within decentralized networks.
Rich Rines Roadmap for Bitcoin’s Future
Final Thoughts
The conversation between Matt Crosby and Rich Rines provides a compelling glimpse into the future of Bitcoin. With institutional adoption accelerating, Bitcoin DeFi expanding, and the growing recognition of Bitcoin as a strategic reserve, it is clear that Bitcoin’s best years are ahead.
As Rines puts it:
“Building on Bitcoin is one of the most exciting opportunities in the world. There’s a trillion-dollar market waiting to be unlocked.”
For investors, developers, and policymakers, the key takeaway is clear: Bitcoin is no longer just a speculative asset—it is the foundation of a new financial system.
For more detailed Bitcoin analysis and to access advanced features like live charts, personalized indicator alerts, and in-depth industry reports, check out Bitcoin Magazine Pro.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
As Bitcoin continues to dominate the financial landscape, Rich Rines of Core DAO explores its evolution—delving into institutional adoption, DeFi expansion, and its potential as a global reserve asset.
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