“The USA is spending its time protecting horses”. The best description of what is going on with #cryptoregulation in USA
Speaker - Chen Zur, CPA, MBA, and a principal in the EY Technology Consulting services group.
#web3#garygensler#blockchain
Yesterday I had a pleasure of attending Cornell Blockchain conference and talking to leaders in the space. My 3 takeaways:
1. The state of crypto regulation in the USA is a train wreck
2. Read the rest in the comments
#cornellblockchain#web3#blockchain#cryptoregulation
If you look at the bigger picture eliminating all the news noise, you will notice where the money is flowing: gold #GOLD (over 2k today) and digital gold #BTC (over 28k)
WHY IT'S DIFFERENT THIS TIME
During the Covid crisis, did bitcoin have its moment? Not really, it nuked harder than anything instead of acting as a safe haven—and then traded like a junk risk stock on steroids, mooning at the same time as dogecoin and monkey jpegs.
During the Russia-Ukraine invasion, did bitcoin have its moment? Not really, interest rates shot through the roof and bitcoin once again traded like a junk risk asset, dropping 65% over the year.
This is the only time over the past few years where we've had a clean price <> narrative coalition. The market signal is clear and undeniable, with bitcoin decoupling from all other assets, even outperforming its own riskier crypto counterparts.
Bitcoin is—seemingly for the first time—working as safe haven asset in response to the traditional banking system and in response to a globally unreliable & jerky central bank monetary policy.
As the US drags, stumbles and fumbles its crypto regulations it’s arch rival waits in the wings…
The center of global financial markets flips every decade or so between London and NYC. London has been exceptionally good at US regulatory arbitrage, when the US flounders on a particular big issue.
The UK was the center of all FX trading post the US leaving the Gold Standard due to US currency restrictions. Things accelerated in the ‘80’s and ‘90’s as London captured the regulatory arbitrage opportunity of the giant Eurodollar markets and again with the derivative markets. London eclipsed NY in global importance and volumes.
In the 2000’s the US gained back its leadership role as EU post-crisis standards tightened and the UK left the EU.
Now we are faced with exactly the same opportunity in crypto. The US is fearful of losing control of the dollar system over time, and is scoring own goal after own goal and dragging its heels on attracting the $1trn +crypto industry.
Meanwhile, the UK has made it 100% that it wants to go all in to capture this opportunity, using its ace card of regulation arbitrage, in which it excels. The UK understands this. It also has closer alignment with the other much needed partners of HK, Singapore, UAE and offshore centers like Cayman, in order to make this globally successful. It will roll out its CBDC soon too.
The US probably has one year to sort it’s shit out, get rid of Gensler and set out good regulation but that seems a near zero chance.
If the US don’t sort their shit out, you will hear the giant sucking sound of London attracting every major crypto firm and accelerating the space globally without the US having as large a say and left floundering.
All the crypto industry needs is a home with good regulation, that speaks English, has a global infrastructure and optimal rule of law and is easily livable. That may well be the UK.
The downside is you get sideways rain for 11 months of the year…
The UK has not finalized it’s regs yet but they know the opportunity.
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3. The remaining 58% could be earned from operations, selling a portion of the stake for liquidity, etc.
At the time of writing this tweet #USDC = 0.9849 which once again confirms the logic described above. The panic is gone, the price will eventually return to its real value.
#Circle held just 1/4 or 3.3 billion in #SVB Bank out of 43.5 billion in total reserves. Simple math comes into play. That's a 7.6% impact on the company's overall balance sheet. In a worst-case scenario, the maximum price of a #USDC token could fall to $0.92.
2. #Circle has $7.8B in cash held in other banks and $32.4B - in short-term U.S. bonds. The portfolio of treasuries on Circle's balance sheet yields about 4.5% annually, which on a $32.4B portfolio would yield $1.47B in coupon income to cover 42% from the potential loss of 3.3B.
In light of recent situation with SVB the big names in crypto space #dydx#Binance hinted at the possibility of a USDC depeg. How likely is it to happen?
ETHDenver 2023:
• Great space, amazing side events
• Inspirational builders with high IQ
• Bear market washed out bad projects
• VCs chase the next unicorn🦄
• Vitalik Buterin secretly gave a speech
• More DeFi projects are being built
Wow, the next week is full of fantastic events where you can meet our team 🔥
📍 Next destination – @binance Blockchain Week 2022, a 3-day celebration with a great chance to explore the future of blockchain with #Web3 leaders sharing their insights
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