First, there have been a series of revelations about monetary officials’ stock trading activity, a controversy that contributed to the resignation of the presidents of the Federal Reserve banks in Boston and Dallas and put the renomination of Fed chairman Jerome Powell in jeopardy Then, last weekend, the International Consortium of Independent Journalists dropped the Pandora Papers. This pool of 11.9 million confidential documents revealed how « 35 current and former world leaders, more than 330 politicians and officials in 91 countries and territories, and a global lineup of refugees, scammers and murderers » have moved assets to offshore oases for businesses and companies Trusts to hide their businesses and evade trillions in taxes.
You’re reading Money Reimagined, a weekly look at the technological, economic and social events and trends that are redefining our relationship with money and transforming the global financial system. Subscribe to the full newsletter here.
You might be tempted to dismiss these revelations as nothing new but a confirmation of what you already know. Others may be inclined to take the – naive in my opinion – view: « Well, all of these actions are not technically illegal, so what’s the problem? »
But it’s important to take stock of these new developments do. They force us to face the harsh reality that there are two sets of rules for society: one for a small group of people with access to the levers of power, the other for the rest of us. Given the difficult economic and social backdrop of 2021, the memory of this unfair dichotomy can only undermine public confidence in the centralized institutions that control our economy.
It also begs the question of what this type of institutional loss of confidence is for crypto means and for the prospects of an alternative, decentralized financial system that its proponents want to build. We’ll address that below.
These revelations come amid a global health and economic crisis that has left the poor suffering tremendously while the rich are much better off, at least financially. They stand alongside the image of politicians too caught up in partisan divisions to enact regulations that enable productive innovation and sustainable growth. And they put more than a decade of “quantitative easing” policies by central banks in a more cynical context, suggesting that monetary policy of questionable effectiveness is being conducted in the narrow interests of the officials of these institutions, and not in the interests of the wider economy.
Money, as we discussed in previous Money Reimagined newsletters and podcasts, is a collectively presented concept. A currency only works if there is a common belief among its users that the system on which it is based serves the common interest. It requires trust in the rules, protocols and institutions that operate this system.We have seen what happens when the foundation of trust collapses: the hyperinflation of the Weimar Republic, Zimbabwe and many Latin American countries; the ingrained, self-reinforcing disdain for the government that makes it impossible for failed monetary systems like the Argentine to break a cycle of recurring crises.
Until now, we have not seen such a breakdown in the dollar-centric global financial system. Despite domestic and geopolitical challenges for the US leadership, most of us still trust this system enough not to give it up.
But that trust is not infinite. At some point, when people see enough evidence that the system is working against them, that belief will fizzle out. If an engaging, alternative model emerges, people may get interested.
That naturally leads us to the aspirations of the crypto community who want a system that uses a decentralized protocol to set rules and execute transactions rather than relying on a corrupt centralized intermediary like a bank or government. Since it is impossible to create an infallible human institution, the idea is to put our faith in infallible math.
I say « aspirations » because there aren’t many concrete signs that the general public – so angry people may be – is ready to take the plunge to bitcoin, stablecoins, or any other token as the primary mechanism for sending and saving money. Some of this is about misperception and education. But it’s also because the crypto industry continues to integrate many of the centralized vulnerabilities that the old financial system faced.
Crypto proponents rightly complain that the mainstream press is too focused on hacks, losses and Focusing on error without adequately addressing the incredible innovations and advances in the industry over the past decade. But the reality is, these issues arise because of a similar structure that made the Fed stock trading controversy and the Pandora Papers deals possible. Crypto is full of centralized entities entrusted with people’s funds, each with the prospect of abuse or failure. Think QuadrigaX or Mt. Gox.
These centralized entities were inevitable because the evolving technology in this industry is not sufficiently developed and the user network is not large or robust to allow for true decentralized governance. This is also because developers have tried to develop applications that are tied to the traditional financial system, making them subject to traditional regulatory requirements that require central custody and user data collection.
Blockchain developers have made tremendous strides in development cryptographic solutions to these problems and in promoting a rapid introduction so that services can be provided in a decentralized manner. The growth of decentralized autonomous organizations (DAOs) within decentralized finance (DeFi) reflects these efforts. But the process is far from over.
Meanwhile, the regulatory framework, at least in the US, is currently not conducive to this decentralization push, especially the tough position of the chairman of the Securities and Exchange Commission, Gary Gensler, who argues that the most token securities are, and suspicious of industry claims that decentralized finance (DeFi) is sufficiently decentralized to avoid this treatment.
Finally, the quality of public discourse on cryptocurrencies remains poor. Rather than focusing on how eliminating trusted intermediaries could fight corruption, the discussion is framed by the rules of the old, centralized paradigm where intermediary institutions like banks are expected to identify and catch bad guys. I assume that many people use the Pandora Papers as an argument against crypto and wrongly conclude that it makes it easier for crooks to launder money.
The reality is that blockchain analysis combined with privacy-friendly tools how zero-knowledge evidence can provide valuable law enforcement tools while maintaining privacy and decentralization. It’s just that mainstream people aren’t talking about them, which means they’re not on the regulators’ radar.
The result: We still have a way to go before there is a viable decentralized solution for the failures of the centralized financial system there. Let’s hope that distrust of the latter doesn’t throw us into chaos first.
The Wyoming Republican invested around the same time she supported a change that would benefit the crypto industry.
The stock of the crypto-focused Bank Silvergate (NYSE: SI) rose 7.6% after Morgan Stanley formulated a bullish thesis for the bank based on the potential for further stablecoin rollout. “As the stablecoin market evolves, with more formalized rules for governance, risk management and structure, it could offer our Silvergate earnings per share (EPS) significant upside potential, especially if Silvergate is able to monetize its relationship with the stablecoin Issuers, ”Morgan Stanley analyst Ken Zerbe wrote in a press release. The assessment cites a new report from the Bank for International Settlements that could serve as a roadmap for regulating fiat-linked crypto assets.
Jared Blikre of Yahoo Finance reports on regulatory plans for crypto that the White House is considering Every October, the Social Security Administration (SSA) announces its annual changes to the social security program for the coming year. Please find below our analysis of the social security changes announced in October 2020, which, according to the SSA’s annual leaflet, should come into effect on January 1, 2021. Keep this in mind as you update or track your social security status.
The White House is considering widespread oversight of the cryptocurrency market to combat the growing threat of ransomware and other cybercrimes, a spokeswoman said Friday. « The NSC and NEC are coordinating across agencies to examine how we can ensure that cryptocurrency and other digital assets are not used to prop up evil actors, including ransomware criminals, » said the White’s National Security Council spokeswoman House. The oversight could include an executive order, Bloomberg News reported Thursday.
(Bloomberg) – California Governor Gavin Newsom frequently touts his state as a leader in state-of-the-art manufacturing and green technology. Now one of the most famous companies in these areas is moving its headquarters elsewhere. Bloomberg New York’s Waldorf Receives Plush Renovation, Becomes Icon Of China’s OverreachTycoon Behind A Real Estate Crash From The Crisis Now Sitting On $ 9 Billion Of Debt Before Interstates, America Got Around On InterurbansHow Singapore’s $ 50 Billion Fin
According to the draft of a Report commissioned by a global anti-corruption agency comprised of governments, corporations and activists, the DRC should renegotiate its $ 6 billion infrastructure-for-minerals deal with Chinese investors. The draft, viewed by Reuters, describes the agreement, first signed in 2008, as « unscrupulous » and calls on the Congo government to repeal an amendment secretly signed in 2017 that accelerates payments to Chinese mining investors and slows down the return of infrastructure investments. The final report is expected to be released this month by the Extractive Industries Transparency Initiative (EITI), which tracks revenue flows in the oil and mining sector and has membership in more than 50 countries, including the Congo.
U.S. Senators approved on Thursday Laws
https: //finance.yahoo.com …
that effectively breaks the debt ceiling may be further down the road to December. At this point, Democrats and Republicans have to somehow muster the determination they couldn’t find now (just in time for Christmas, as if we needed even more uncertainty that volatility causes around the holidays) to stave off the whirlwind of our own indiscipline.
Ireland has been forced to abandon its low-tax business model due to pressure from Joe Biden, which threatens the country’s status as a haven for global corporations.(Bloomberg) – President Joe Biden is under increasing pressure to deal with the rise in gasoline and fuel consumption Keeping Natural Gas Prices Threatening Economic Recovery and Democratic Political Ambitions Under Control The crisis-era housing crash now sits on a $ 9 billion mountain of debt.
Last month, only 194,000 jobs were created while it was in gives the US nearly 11 million job openings and 7.7 million unemployed Americans.
Biden beh He doesn’t suffer from the big problems that are holding back the economy and voters blame him.
The suburbs of Cork, Ireland’s second largest city, are an unlikely location for the European base of the world’s largest corporation.
A federal one Student loan program, which largely failed to help borrowers cancel debt, has been redesigned. Learn who qualifies and how to get discharge here.
Below is the full transcript of the Hudson Institute event titled A Dissident’s View of Communist China
The honeymoon is definitely over. Less than nine months after taking office with the highest number of votes ever received by a presidential candidate, President Joe Biden’s approval rating has hit a new low as a majority of respondents question the authority of his administration. A Quinnipiac poll released Thursday shows the 46th president’s job admission rating ranged from 38% positive to 53% negative. This …
(Reuters) – China ordered miners in Inner Mongolia to increase coal production, and oil prices soared on Friday as a record hike in gas costs stimulated demand for the most polluting fossil fuels to keep factories open keep and heat houses. The recovery in economic activity from coronavirus restrictions has exposed alarmingly low natural gas supplies that are creating trouble for traders, industry executives, and governments as the northern hemisphere drifts into winter. The energy crisis https://www.reuters.com/business/energy/global-energy-shortage-or-coincidence-regional-crises-2021-09-29, which has led to fuel shortages and power outages in some countries, has highlighted the Difficulty reducing the global economy’s reliance on fossil fuels as world leaders seek to revitalize climate change efforts at talks in Glasgow next month.
In a new interview, Michael Dell said , CEO of Dell Technologies, described the US-China economic relationship as « frosty » and said he welcomed US support for the technology sector to counter such subsidies in China.
Keywords:
