Big European states call for cryptocurrency curbs to protect consumers
reuters.com
reuters.com
So either backed in whole is fine, and not backed at all is fine? But not partially backed? No room for a middle ground? Seems silly, and mindless.
Yet banks, whose entire business is partially backed fiat money are kosher? Almost seems like bias towards old businesses. I have nothing against banks but this smells kinda like big-bank flexing it’s muscles to push out competition.
Moreover potential major bodily harm versus potential loss of savings don’t seem directly comparable.
In other words, it's still a financial deception --- commonly known as a "scam".
Attempting to sell part of a bridge that you may or may not own is still an illegal scam in most jurisdictions even though some may be "fine with it".
Otherwise most people want currency that they can use anywhere ideally also without the use of any tech, that is stable, and "chaperoned" by institutions that are under some pretty intense supervision (all things considered).
Where this gets interesting for me is 1) stablecoins like DAI, which collateralize using other cryptocurrencies, 2) projects like Celo, which are doing something similar to Libra but with way less initial runway for backing EU-sanctioned reserves, and 3) projects like Reserve Protocol, which aim for something similar to Libra’s original goal (achieving “stability” relative to an algorithmic balance between the real value of currencies, goods, etc).
From the article it’s not obvious to me whether a lot of this could be evaded simply by not marketing your project as a stablecoin.
[1] https://fortune.com/2020/04/16/facebook-libra-multiple-singl...
Basically, in most civilized places, if you want to be a bank there are some rules to be taken into account. That's why stablecoins are so hard to do because as soon as you start transacting, you are exposed to those rules because you basically become a bank like entity. So, authorities wake up and start paying attention as soon as you do that.
The projects you name are interesting because they are all based in the US and are being built with good old investor cash raised from the usual suspects (i.e. VCs). So, they have share holders and are operating under US law. Basically all three are really talking about building similar things but as an outsider you have to wonder who wins if their token business is successful: the share holders or the token holders?
There's a bit of friction here between the marketing on one hand projecting some kind of utopian decentralized thing and the obvious desire of the investors to turn this thing into a very centralized money funnel straight into their pockets. The reality is of course that these are companies and not charities and the reason investments are so high is that they are looking to tap into significant streams of cash. Just like banks.
https://louwrentius.com/cryptocurrencies-are-detrimental-to-...
I wish that smart people involved with this kind of technology would spend their time on something more relevant / important.
Cryptocurrency has a useful purpose: freeing people from government and the choices that government impose on people.
Your government doesn't want you to buy weed? You can buy it with cryptocurrency from an online market instead of doing a shady deal in a dark alley, with a higher risk to be scammed.
Your government is filling the economy with bubbles through quantitative easing and "stimuli" or by printing money? You can move part of the economy to cryptocurrency.
Your government is stealing 50% of your income under threat of violence? Some cryptocurrency can be made harder to track and can be a useful tool to fight government aggression.
I doubt cryptocurrency will get us anywhere because the government can just ban cryptocurrency at any time, but there is a clear purpose.
I mean, it all boils down to the problems it causes in the fabric of the society and every society is different but when things happen at scale at dangerous rates dangerous things happen. You can be sure that if your citizens find a way to loose their savings quickly enough on lotteries you will have them banned too. If you have your citizens spending everything they have on chocolates, you will have chocolates banned despite being delicious.
These things tend to be reactionary IMHO. I wish we had a better reaction to the 2008 crisis though.
Don't worry though, if you have a lottery craze with too many people putting too much money in it and only few happen to profit, you will have lotteries banned.
Until that happens, people can freely loose their money and I am in favour of it. Let's not have commissions that decide where people buy their hopes and entertainment, right?
But that's the explicitly stated purpose of a lottery. The goal of the lottery is to have as many losers and as few winners as possible, in order to attract people with larger and larger jackpots.
At the current state of affairs a lot of people put in a little bit money and very few happen to profit from it. Due to the fact that most people put negligible amount in, it doesn't create societal problems, thus not banned. AFAIK there is max amount spent per person in some jurisdiction though.
Modern fiscal politics, from VAT onwards, is all about trying to tax the poor without them noticing.
Or, as the cynics over here refer to it "The Stupid Tax".
The odds of winning £1million on the UK National lottery are 14,000,000-1. If you really want to maximise your chances of winning £1million, go down your local friendly bookies and see if you can find 1,000,000-1 odds being offered on any stupendously unlikely event and put your money on that. Your bet is 14 times as likely to come up as your lottery ticket is.
The US income tax is even worse. The poor pay higher marginal rates than the rich as a result of overlapping benefits phase outs. Then there's payroll tax, which not only charges higher rates to ordinary people than billionaires, it hides half of what you're paying by pretending the employer is paying it, even though they're not -- but doesn't hide it when you're a small business owner, which provides a psychological deterrent to entrepreneurship.
The whole thing needs to be scrapped.
Personally I think this kind of use of the word "scam" spreads the meaning of the word too thin, making it much less effective when used to describe real scams.
Modern states don't see it as acceptable for private entities to transact however they like. There are aspects of taxation and law enforcement that are currently implemented via the monetary system and they don't want bitcoin et al to circumvent that.
If the quote is taken literally, then the concern lies with ensuring that ultimate control over the size of the money supply, interest rates, and inflation lies with government and not with the private sector.
Privately-issued currencies not backed by central banks are extremely vulnerable to liquidity crises (bank runs) and other failures. See the economic situations that lead to the establishment of central banks in most countries for examples.
If private, unbacked, currencies became widely used, internal crises could trigger recessions in the real economy. Most governments would rather avoid this risk by disallowing the establishment of substantive independent monetary systems.
And a bitcoin scam can rob you of thousands in a minute. That's a lot of lottery tickets.
Crypto investments are difficult to judge by the unsophisticated investor, and can easily be persuaded to invest large amounts. The loss is quite devastating for that individual. And when it happens, it makes for bad PR for the gov't and financial regulators. Better to nip it in the bud before it happens - even if it takes out investments that _would_ have been good for said unsophisticated investors. It's a conservative approach to policy making.
How stable do you think the prices of fiat currencies or assets such as gold would be, if governments were constantly trying to ban them, regulate them out of existence, render their use nigh on impossible, or otherwise stigmatise their usage?
Governments around the world are terrified of 'the people' being able to conduct financial transactions without themselves [government] and the financial sector getting a cut. They also loathe the idea of the anonymity and pseudo-anonymity cryptocurrencies offer. Government wants to know, at all times, where you are, where you go, who you associate with, what you say or write, what you spend your money on... etc. etc.
To a large extent the populace has given them much of this on a plate already by voluntarily carrying mobile tracking devices wherever we go and by paying for most of what we buy with our debit and credit cards. Widespread adoption of cryptocurrencies would really put a spanner in the omni-surveillance works and must therefore be stamped out at all costs.
But people should have every right to make terrible investment decisions and lose all their money. There are investments in crypto that are good and bad just as in the stock market. Some people turn anything into gambling and thats a personal issue.
As an example, https://www.deutsche-bank.es/pbc/data/es/hazte-cliente-cuent...
Every product is given a risk between 1 and 6 where 1 is the most safe.
Correction: Crypto investments are impossible to judge by even the most sophisticated investor.
The reason --- missing data, lack of transparency by unregulated exchanges.
And of course digital goods are always a good option, no matter where you live. Like domains, hosting, email or VPNs.
It's really popular for underground stuff, anyway, everything else can be purchased with a normal bank card (or Paypal).
Bitcoin is not used by sellers in most countries afaik, because there's simply no need for it (yet).
What I ma thinking about is say someone offers to pay me in bitcoin I would have no choice to transform it in real money and put them on a bank account so I can use them. Probably makes sense to use bitcoin to create online accounts for stuff that you don't want your card or email to be linked to.
I don't trust banks that much either but it is the less risky thing considering my in existing skill at financial stuff(I did not consider bitcoins or stock market because it feels like gambling with my or my son future, and I think I am risk adverse)