Global stablecoins could be “posing systemic risk” to EU and more… | Crypto Market News
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These are civil lawsuits brought by individuals, in class-action, against these companies. Not brought on by the SEC or the CFTC or any regulators or governments. What does it mean? It probably means that a lot of people are pissed off because they lost money and are trying to get some of that money back.
It also means that in the US, the way the legal system works there, when precedent is made by judges in these cases, it very well could lead to the SEC or some other regulator also pressing charges of a criminal nature. It could also be civil injunctions etc. applied by these governments.
So, it is interesting to watch. Could be a first step in what could be a long road for these companies. Some of these companies already have liginations or grand juries pending against them in New York State. So this kinda adds fuel to the fire.
Massive level of speculation when people talk about institutional money flowing into crypto. Some of the data points that they use may make a bit of sense, but most don’t.
When an asset falls 50% in almost one candle, you better believe that some smart money is going to flow in and try to catch some type of wave on the way back up.
Was there institutional money in the pop back up from $3.7k up towards $7k? Yeah, probably. Was it flooded? Was it a majority? Kevin hasn’t seen any compelling data supporting this.
If there was a lot, what happened? Why has the rally fizzled? Was there just no more buying pressure going past $7k? What happens when the rally fizzles? Are they just holding the asset, or are they selling it back to take a profit, and get some of the money they lost on the fall down.
The Bank for International Settlements calls for central bank issued digital currencies. Does it have anything to do with Coronavirus? You could make the case that disease spreads via paper money, but disease spreads via credit card and hardware wallets too.
At the end of the day, digital currencies are needed — not so much because of Corona — but it proves that they are desperately needed. Why? Look at all this stimulus money that countries are throwing at their economies, and look at how fucked the system is for delivering that money.
The US is trying to find information from your last filed taxes, and then trying to figure out how much money they should give you, and using the same means they usually pay out tax refunds.
Kevin saw an article from New Jersey, that they are trying to find programmers for a 60-year old programming language, because their systems are overloaded from paying out benefits to all the suddenly unemployed people.
So, the “call for digital currencies” are more because they realise that their old systems suck, and they suck even more when put under a bit of pressure.
Bitcoin probably “garners new users” on a daily basis anyway. Has it gained more users? Well, a lot more attention has been on Bitcoin lately. But don’t think that the vast majority of “normies” out there are hearing “they are going to print $2 trillion in the US, Germany is going to pump $800 billion” — and some normal guy goes “Ohh.. Bitcoin!”. No, that’s not happening. People have other things to think about.
There are new people coming in, for sure. Maybe slightly more now. Are massive amounts of people flooding into Bitcoin because of Corona, that they lost half their savings, and Bitcoin is going to save their life? No, probably not. If they don’t have money to eat, then they don’t have money to buy Bitcoin.
The people that have money might be reallocating money to different sources. Hyperinflation is probably not going to happen in the US for many reasons. The US Dollar is much different than the german mark during World War II, or the Zimbabwe dollar in recent times, or the Argentine Peso. We are talking about a whole different animal. And most of those rules, fortunately or unfortunately, do not apply.
Most people don’t dig that deep. And if they don’t have money for essentials, and they are worried about their job security and their portfolios, they are not thinking about allocating things into a speculative asset. That’s for sure.
So, the word “startup” automatically makes you a risk. Right? And then you are dealing with crypto. Same problem that everybody is seeing around the world. Banks don’t understand it yet, for the most part. And if they do understand, then they are starting to understand that most of these companies deal in transactions, so they will only give transactional income to the bank.
Banks don’t make a lot of money on transactional income. And these crypto companies are not taking loans, they are not taking credit — which they probably wouldn’t be given anyway — thus the bank is not making money. If they are holding the money in money trust accounts, they can’t even give loans on the back of that money. So they literally make no money, and the compliance risk is outstandingly huge because they are taking third party assets, and then forget it if they are virtual assets because of the security aspect.
So it’s a large risk and they are not making any money. Why would they take on the startup as a client? That’s not just Germany, that’s everywhere. Unfortunately, until crypto companies can show banks that they can actually be profitable for the bank and that there is a reason for them to partner with the crypto entities, this probably won’t change.
This is not cryptorelated, except that he is a Bitcoin naysayer. Of course, he was a Bitcoin naysayer, and then JPMorgan created their own crypto asset.
Kevin hates to say it, but you can praise the stimulus and say that they got something done. But of course there is going to be a recession. A fucking huge recession. Based on a number we can’t see in the Coronavirus, huge decisions were made. “it’s better to lockdown because people won’t die, but we’re going to screw the economy. Because we’d rather have people alive, out of work and destitute, rather than at work and sick”. Maybe they’re right. Maybe they’re wrong.
What is definite, is that the recession that comes out of this, will be huge. It will be the biggest global economy anybody alive has ever seen, and possibly the biggest recession in modern times, since we had money. And it’s going to be much bigger than any way. Imagine if this starts to create civil unrest and civil war in many countries? Imagine that those wars are caused by the effects of what we did for Corona.
Anyway, massive. Fucking massive. That’s what the recession will be.
Not really. What poses as a systemic risk to the EU, is the EU itself. It was a failed experiment from day one, and it has been shown that it’s failing. And eventually it will probably fail. Will that mean that the Euro fails? Fails — maybe. Does it go away? Probably not.
Kevin thinks that at some point some countries are going to stop wanting to float the bill for everybody else. Not saying it’s going to happen now, but a big stress test is put on the Euro right now.
Global stablecoins.. — if we had something like Facebook, and let’s say we have 2 billion users — that all started using one particular type of currency, sure. It can cause systemic risk for not only the EU and the Euro, but also for the USD, GBP, and everybody else.
Those things haven’t happened yet. Will they happen? Kevin doesn’t know. But this is one of the reasons why central bank issued digital currencies will happen, and probably sooner rather than later. Mainly because they are starting to see the benefits. And they are starting to see the risk involved if they don’t do it first.
And while you may believe that having private money is a great thing, private money can also ruin public institutions. And if it does, then it’s going to ruin a lot of things in your daily life.
Central bank issued digital currencies are important. We can’t just change the way our ecosystems work. Our entire macro-economic machine can’t change overnight. We have to go there gradually. And central bank issued digital currencies are the next step.
Kevin would pretty much say that they are right with that. Internet voting is definitely not secure. Blockchain can make votes and results immutable, but “garbage in, garbage out”. Meaning if you get fake votes in, you just get immutable fake votes. And that doesn’t help anything.
Yeah. Kevin has said this a billion times. Telegram, and every other case we talked about today — number one on the list of ten — will also lead to more legislation, that’s for sure. Maybe it’s not good legislation, but it’s going to be legislation.
So it’s a 100% accurate, and it’s kinda a “no shit, Sherlock” statement.
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