Janet “Yellin'” Yellen, known as the Yoda twin of doom to her friends (not really), has been wrapping herself in a whimsy of lies over the past weeks. In an address Q&A live with Congress, she showed complete control of her confidence in her well-researched, concrete, set-in-stone lack of concern for what little inflation, if any at all, we were currently experiencing, and she and others spoke to the certainty that no corrective measures or interest rate adjustments would be necessary at least until 2023. The tune later changed to light ‘transitional’ inflation, while now the 2-3% over-correction is becoming evident as the market speaks more in the range of 27-29%.
Surely, this is the gal we all want running the show on a new era of the digitization of money as we know it. First come, first serve regulation seems like its on its way in dozens of countries, and they always seem to be so pleasantly organized in their attacks against anything taking place in the free market, if one can address it as such with a straight face.
Add to this, Gary (Gary Gary Quite Contrary) Gensler, SEC, sent out a tweet as a friendly poll, asking “which” cryptocurrency people thought had the best chance of lasting; BTC, ETH and a few others. Pardon my cynicism, but considering the SEC’s role in market manipulation over the past year, does this seem wildly inappropriate even if intended as one of those ultimately creepy “hey, I’m one of you guys, right?” kinda moves?
All of this to say, that countries are announcing their reports on CBDCs, Central Bank Digital Currencies, and next week supposedly the U.S. weighs in heavier on their concerns over stablecoins, and leading countries on every continent are all giving that looming message that “more needs to be done”.
First of all, color me skeptical that there is anything new going on here, but Tether, USDT, the largest, highest in volume, most widely known and used stablecoin, has been under fire for 4 years now, and despite it always being reported how they have under-reported, acted sketchy, played a role in nefarious activity, always ends up gaining in confidence at actual market, while the same people using it speak as if it is the enemy.
Either the governments of the world are this out of touch and inept, which is entirely possible, or they are comfortable with their role in manipulating markets, and I’m not comfortable with either of the two options.
You see, stablecoins have not only been “out there” for years, but companies like Paxos operate completely, entirely, clearly, basking in the sunlight of extreme New York regulation, fairly and legally issuing their gold coin, their dollar coin, and legally issuing the same for Binance and others. You can’t get regulatory clearance without the government being fully aware that they have provided it! The extreme disconnect between truth and reality is enough to dishearten the strongest cryptonian who is fully of their faculties and deeply plugged in to the power source.
I’ve probably mentioned in the past, and will do so many times in the future… I am not a Bitcoin maximalist, but don’t tempt me. I am very close to being one, but for the faith I have in a few smart minds in the industry. Whether anyone likes it or not, this is a new industry. It is susceptible to the true criminals in the room; the government agencies.
While actual ransomware, extortion, drug running and tax evasion all exist, and admittedly they are problems, they are infinitely smaller problems in the world of crypto, and even less with stablecoins.
The real issue with stablecoins, is that they ciphen off volume from the actual assets they represent. But, even more importantly, they make it easy to move to and fro, exchange to exchange, wallet to wallet, without having to pass through a bank, triggering the governments full ability to track where your money goes. Just because they may, on occasion, have a good point about the reason they want more control, doesn’t mean it is in our best interest to lend it to them. The CBDC is in direct competition with stablecoins, and I for one, honestly don’t know where this is all headed. I can accurately guess at the options and likely outcomes.
In the U.S., we have a truly Orwellian Federal government, followed by a small handful of independent states that want to embrace crypto for all its opportunities. The few who get it, can see that crypto has the potential to be good for every other industry that it connects to. It can bring jobs, better utility in energy, it can reduce the threat of our dependence on China, and meanwhile the actual crypto projects could actually be used to solve some of the major problems that exist, both in government but also for humanity. One can start sounding quite grandiose when talking about the hope crypto can bring to mankind, but many of these things are more than just lofty words. Real solutions may abound in the crypto space, but it might be helpful for governments to do more in embracing them, instead of lumping an entire industry in with terrorists and drug lords.
Here we are, in 2021, where the sluggish giant that is mega-governmentalism is just as lethargic and deadly as ever. While the threats are always looming, they are rarely followed through with more than new threats. An occasional case like that against Ripple via the SEC take place, while claims regarding their status as a security may exist, though weak, no one could truly argue Ripple as some kind of outlier, rogue, seedy element operating outside of the rules or knowledge of authorities, but where are the authorities when true scammers take off with tens of millions of dollars in stolen assets? Usually the government meanders in a few years later to give a status report and ask for more details from victims. But, a supposed bitcoin-backed ransomware event happens directly impacting the government, and they somehow recover some funds in a day. Someone explain this to me. On second thought, don’t.
None of us know where this is headed, but one thing is for sure; we don’t want global governance to get its way. If ‘they’ win, we end up with an explicitly dumped market, zero stablecoins, including those already granted approval, and in their place you are allowed to trade this narrow list of cryptocurrencies, but only using CBDCs. Everything will be tracked. Every exchange in every country will be forced into open record keeping, kyc/aml, spying on every activity of every user. Governments will lie about the limited role CBDCs will play in surveillance or programmed, designed utility, but we all know it will be lies, since there is no authority to investigate the authorities when “they”- are all “them”.
The other option, is that it simply brings too many advantages to the banks and bankers, to have a rogue element for manipulation in the cryptosphere, and this buys us a small piece of the freedom to continue about our business as we have had in the past. I’m opting for the benefits that greed and banksters (let’s give them the proper respect they deserve) lend the market as the only safe hedge against corruption in government. Truly, us little guys are in the wake of waves in the water whether we like it or not. The question is whether it benefits bankers more to have a hand in this blessed asset class, or whether governments benefit more from the control they can lord over us all?
And on that perdy note, a skeptically optimistic crypto Gordon Freeman, for now… out.
