Originally published at: Some Dems Warn Colleagues: Crypto Bill Could Inject Some 19th Century Chaos Into US Economy
The Senate is poised to pass the GENIUS Act in the coming weeks. The bill will bestow upon the crypto industry a long-sought blessing: a key form of the digital currency, stablecoins, will now be subject to a bespoke (and notably light-touch) regulatory system created by Congress. With it will come the U.S. government’s stamp…
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From what I can understand from the article, banks will now be able to create their own currency, but not required to hold reserve deposits to back that currency? Basically, it is one thing for a bank to have a financial instrument, it is another to have one that has no regulation. So really, am I understanding this right?
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It’s still a mystery to me what purpose this shit serves, beyond allowing some doge type libertarians to hide their money and dodge taxes.
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More like post-Soviet collapse chaos. Every emerging oligarch in Russia launched his own bank after the USSR fell apart. There were several thousand banks at the peak of the nonsense. It’s great to have your own bank, and even greater when all you owe your defrauded depositors in an insolvency proceeding is electrons. Now here in America, everybody who matters, Meta, Apple, Google, Elon, Peter, everybody gets their own bank – and “we the people” are on the hook for their screwups. Of course, we all believe that these people are gods and never screw up, so please take our fiat money. It’s just a fiction until the Fed has to bail them out and keep their “doors” open.
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“Of course we all believe that these people are gods…”
I haven’t believed that in the entire time the internet has been a thing.
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Based on the actions of TSF and his spawn, crypto is a means for “certain people” to be able to print their own money, pretty nearly as much as they want. The goal with the Genius Act appears to be to have the US taxpayer backstop that money, removing a lot of the risk for the malefactors of great wealth and transferring it to the average Joe who will never have access to this bespoke wealth.
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Elon seems confident of his god status when he’s sufficiently juiced on ketamine.
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Been retired for three years, and already my understanding of business and finance is being challenged. Hate being out of the loop, and disconnected from my usual sources of information. Cryptocurrency and AI are two areas where I would dearly love a reliable but clear and concise tutorial on what the bleep is going on.
My take. Crypto is the latest in a series of derivative financial instruments… a security whose value is based on the value of another security. It is a way to create money. Currency and securities need to be regulated to prevent fraud, corruption, theft and other criminality. Because it’s actually money, it also needs to be regulated for all the reasons money and banking are regulated. This bill is a first attempt, evidently a puny one, to apply regulation to cryptocurrency, which is better than no regulation at all, which (I’m guessing) is why some democrats are supporting it. All of which, if it’s correct, does not equip me to understand the pros and cons of the legislation and the gaping holes that remain if it is passed.
So, yeah, it’s a mystery to me too.
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Two years from now you look in your GoogleBank Crypto/Stablecoin account to check the balance of your life savings, only to read “0”. All gone. So you ask the Google AI “WTF happened?”
Oops, something went wrong.
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My senator, Mark Warner, is normally OK, but he was a cosponsor of this garbage. He wrote back that the crypto bill “is not perfect” (Congress-Speak for “it’s awful”), but somehow, we have to regulate a $250-billion business. I dare say illicit drugs are a more than $250-billion business, but does that mean we must legitimize it?
Also, “it’s bipartisan,” which is always the last refuge of somebody trying to justify crap legislation.
Finally, he’s “concerned” (in a Susan Collins sort of way, I assume) about the Trump family dealings in crypto, and this will somehow address it. I suppose Warner didn’t read the SCOTUS decree placing Trump above any law.
Pathetic.
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Digital currency is not really a derivative. That is, the underlying value is not dependent on the value of something else. It is a token.
That said, the question becomes, what can you exchange that token for? In other words, what makes that token a financial instrument, other than some libertarians wet dream. And that is often the problem with crytocurrencies, how do you really buy anything? To me, they seemed mostly to be financial markets, or better described as little separate economies all to themselves, mainly setup to exchange different types of illegal services and assets, from what I could tell.
Presumably, if a bank issues a token, then the bank might be willing to back the token. That is like issuing its own currency, or bank note, but with no reserves or assets to back it. And that is what the article discusses.
And that is a Wild Wild West scenario. Want a little bit of over-leveraged banks anyone?
If this is what this is, I am truly struggling to understand why anyone thinks this is a good idea.
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To me, it seems that the people most interested in cryptocurrency are the uber-wealthy techbros and their wanna-be hangers-on who spend a lot of their efforts at the fringes of what’s legal. They really want the US taxpayer to legitimate and backstop a whole lot of very sketchy enterprises. The idea that maybe they shouldn’t engage in illegal activities just does not compute to the masters of the universe, just as it didn’t for their predecessors that did business with Stalin, Hitler, Mao and every other dictator in the past hundred years.
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To me, this appears to be the endgame: Destroy the US Dollar and escape into a made-up currency. Then everyone must trade on some oligarch’s currency.
If you wanted to destroy the West’s Global Economy, this is how you do it. Any nation still using the USD as a reserve currency is going to get destroyed.
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Its insanity how bad of a idea this is and how those who are normally sane are chasing the money right off a cliff.
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Multiple currencies… makes sense right? Mebbe I’ll print my own. Why not? What’s to lose? If a bank can do it why not people? After all crypto is not government backed and trump created his own crypto.
Republicans… this is seliberate stupidity.
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19th C financial chaos:
Each day, my wife and I wake up, turn on the TV and ask, “What has he done today?”
And he still has a 45% approval rate. Who in hell are these people?
To call them stupid is an insult to stupid people.
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Trying to monetize the “full faith and credit of the United States of America” before leaving office for Mar-A-Volga.
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Only a matter of time before the Fed has to step in and bail out a bank to stop the economy from collapsing. What’s underpinning all of this is the grifter’s confidence that in America we socialize loss, and white collar thieves almost always get away with it.
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One of the biggest stablecoins, Tether, is run from El Salvador.
The land of experienced, organized criminals.
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How long before crypto funds terrorism such as another billion dollar attack on the capitol. Untraceable bribes to MAGA lawmakers. MAGA may think untraceable bribes would be what would really make America great. I disagree.
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