ECB calls for proactive stablecoin regulation and more… |Crypto Market News
Thrilling market news with CoinMetro’s CEO, Kevin Murcko in This Week in Crypto!
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They’ve called for it before, and they may have screamed from the rooftops about it.
It’s funny how people assume catalysts. Right now there’s a big assumption with CoVID, the fact that people don’t want to touch money — like there never was another infection that could pass via money — that’s what’s propelling everybody into digital.
Everybody right now has been focused on removing the direct connection when doing business, so digital money sounds like a good idea.
Kevin hopes they’re proactive. It’s nice that they’re calling for proactive regulation. Just like what they did and are doing with crypto regulation, they need to understand what it is, where the risks lie, and how to apply traditional regulations to those risks, and create carve outs where they can. For example, e-money licenses in the EU. Many stablecoins would fall under the term “e-money”. That’s because the term is broad, “electronic money”. What is electronic money? Digital money? Is digitalized/tokenized money still electronic money, or something else?
That has nothing to do with regulators, that’s legislators. Legislators make the law, regulators enforce them.
It’s good that they’re going to be proactive. Around the world, regulators and legislators are starting to open up their ears and listen to people in the industry.
Positive news all around. Kevin won’t say it means Bitcoin is going to 100k. Someone will say that. But it doesn’t mean that, in Kevin’s eyes. It does mean that the use of this type of technology — even in a centralized manner, which is what the technology was initially created to get away from — is solidified and puts credibility behind the idea. Which is good.
Kevin thinks it’s a little ridiculous to think this way. This guy is probably on the side of the fence of privacy and decentralization. Look, keyless wallets, and the ability for people to use these types of assets without having to understand what a private and public key is, is absolutely key to mass adoption and thus the expansion of the market. And so that guys that have been holding onto Bitcoin for ever, can maybe potentially see that 100k/BTC one day.
If we are only providing a very steep learning curve asset, that has no underlying value to many, then we’d never see those prices.
Kevin would say that this is the same type of guy that said — back when Internet chat rooms first came out — that “Big businesses shouldn’t get involved. It should be only for the people. If you have to go through an Internet service provider that is owned by a conglomerate, then it’s not the internet!”. But here we are today, where all our data is tracked all the time. And everybody is on the Internet.
These types of statements come from people that don’t have the ability to expand their mind, to think outside of the box. Everybody has a cozy box that they live in. But it is important to be able to step outside that box.
Kevin predicted this whole Telegram saga even before the initial SEC action. This one was kinda expected. They hoped that the SEC action would allow them to refund only US investors, and keep a good portion of the $1.6b they raised. What they forgot is that it could have an effect on their entire offering, regardless of where they sold it.
Telegram has a lot of money, it doesn’t really matter to them. It probably puts a damper on some of the cool products they thought they were going to launch.
If you’re big, you will be a target. If you’re not big, you best be sure that you’re ready if you do become a secondary target. Because a lot of these big cases wheel in smaller secondary fish.
Repaying someone with a token that is considered a security, obviously isn’t going to work if you’re basically being put up in front of the SEC for selling of unauthorized securities. If it was agreed upon by the SEC that it was a utility token, then it maybe would have been a bit different. But still, redemption usually needs to happen in cash.
Kevin will make fun of this one when it actually happens.
The idea of DeFi — Decentralized Finance — is a great one. Kevin likes it, and thinks it can be used for many things in the future. But it might be somewhat centralized, unless we can make a system that can absolutely survive through any crisis and without any human interaction, and even with the eyes of the regulator on them. So much so, that the regulator needs to adapt the way they do business, in order to service the underlying DeFi community. We’re not there yet. Kevin does think we have the potential to get there.
But statements like this, “fully redeemable” — if it is a stablecoin pegged to an asset, you should have the assets somewhere. So it should be redeemable.
DeFi is going to grow. It’s going to fall on its face a couple more times, before we get to the point where we can really hang our hats on it. It’s not a broken system, but it has many broken pieces that need to be fixed. Look what happened with the CoVID crisis. We had things almost exploding, like MakerDAO. Because the theoretical mechanism that they built, didn’t really work that well in the real world.
Well, guess who wants to list Libra…
That’s a pure business move. Kevin can’t begin to say what’s in CZ head, but anybody looking at Libra — the reason why Libra is so attractive, is that 2 billion user accounts are tied to it. So you become the test pilot exchange for Libra, 2 billion users behind you. So of course you’re going to say you like it, especially being unregulated like Binance.
Libra will become a thing. But it’s not going to be any different from PayPal, venmo, it’s just going to be a digital version in a DLT. It’s not going to add substantial more benefit for society, but it’s going to give Facebook the ability to potentially monetize 2 billion user accounts. So, that in itself, even if it’s not innovative, is big.
Curious to learn what’s stalling Libra? Read CoinMetro’s take on Libra 1!
Forget about the Netherlands. The EU as a whole had to get this done. If they were sitting in the Netherlands thinking they had a loophole — they’re idiots. They didn’t have 2 weeks. They had years! And the bar is not set that high. If they can’t reach that bar, then they have no business running that business in the first place.
And by the way, 2 weeks — they only have to file a draft application. The draft application — Kevin looked at it for CoinMetro because we will go through this process at some point in every European country — it’s not a difficult filing. If you compare it to a Payment Institution License, or an E-Money license, or the BitLicense in New York — it’s a walk in the park. Literally you can finish the registration as you walk in the park. It’s not even a license, it’s just a registration.
Well, they probably have some cheap electricity, some corrupt officials. Perfect storm. It doesn’t surprise Kevin in the least. They probably get “free” electricity, and give kickbacks to some government officials. That’s why everybody ends up there. You can’t compete with someone not paying with electricity. Especially if they’re in the country where the vast majority of mining hardware is created, and the logistics are days better than anywhere else. Because those few days may increase the hash rate within the next coming cycles to where you miss the few days and profitability on the machine you just bought.
What it shows is, you can’t really talk about decentralization, because mining is centralized.
The electricity is used to run miners. Miners keep the Bitcoin network alive, and are rewarded in Bitcoin. The Bitcoin reward is about to be cut in half. Or halved: Read about the Bitcoin Halvening.
Yeah the 70% people actually pay for, sure. The 1/3rd of global BTC hashrate that happens in that Chinese region — how much you want to bet that none of that is renewable?
Statistics have shown with the CoVID nonsense that you can take any number, and either make it look really good, or really bad.
Those 75 companies put together probably don’t have the user base or the extent of possible expansion that the Facebook conglomerate has. And Facebook is most likely already further along.
But competition is great. There should be many, many competitors. A world where you can choose between a government backed inflationary currency and maybe a deflationary digital currency, that is not backed by fiat, versus private individuals that do the same. It’s going to be a world we can pick and choose. And that’s probably a world we all would like to live in.
When choice is taken away from you, life sucks.
Well, the first words in that sentence were “Justin Sun”, which means it’s probably bullshit, and a marketing ploy. It may either never launch, launch poorly, or launch and he’d say it’s getting used, but not really.
We don’t necessarily need another crypto influencer with a stablecoin. What we need is a stable company or government or institution, that can actually back an instantly redeemable stablecoin, that can actually be used for more than settlement between exchanges or nefarious tax evasion, or moving money across borders where there are sanctions.
We do need more reliable stablecoins, but we need them to be made by reliable people and institutions.
Next “This Week in Crypto” with Kevin is LIVE on our Youtube channel on Friday!