Priscilla Li

Communications strategist in Asset & Wealth Mgmt, Insurance, Fintech, Disruptive Tech, Financial & Professional Services; CSR; Performing Arts; Tennis; INTJ

[Christopher Perkins 🦅🌎⚓️NYC @perkinscr97]

Do you want to know the killer tradfi use case for zero knowledge tech? Credit. Lenders need to understand the credit worthiness of borrowers, but borrows deserve privacy across their holdings. Bad things happen if 1) borrowers misrepresent their assets or 2) confidential holdings are leaked. Zk solves this age old conundrum.

[Laura Shin @laurashin]

How BlackRock’s New Fund on Ethereum Got a Very Crypto Welcome

On @Unchained_pod, Securitize CEO @carlosdomingo discusses BlackRock's new $100M BUIDL Fund:

🌍 Why they chose Ethereum
🔥 Why public blockchains are better
🏃How Crypto Twitter front ran their announcement
🌪️ The Tornado Cash dusted ETH sent to the fund

Timestamps:
00:00 Introduction
04:17 Introduction to the BUIDL fund
05:01 Fund rewards and crypto airdrops analogy
07:10 Regulatory considerations for the onchain product
08:23 Securitize's partnership role with BlackRock
10:40 First-day fund inflows and target investor profile
15:36 Why BlackRock chose Ethereum for the product
19:07 Carlos on BlackRock's crypto stance
20:37 Crypto Twitter “front-running” of fund announcement
21:57 Handling of unintended funds, like Tornado Cash-dusted ETH
25:52 Contract security and user safety measures by Securitize
27:26 Roadmap for BlackRock and Securitize partnership
29:10 Weekly recap

[Andrew Ross Sorkin @andrewrsorkin]

🚨Mnuchin just told us on @SquawkCNBC that he is putting together a group to try to buy @tiktok_us.

[Austin Campbell @austincampbell]

This is actually a rather complicated topic and depends on the frame of reference.

To explain how I think about it, we have to look at TradFi. There, we have multiple types of systems where we have various kinds of guard rails:

1 - Cash, which is to say untraceable except for the point of contact where you deposit it with a major financial institution. Most purchases do not have KYC, they are not reported to any central repository, and overall, it's pretty clean to move it around quietly. Depositing large amounts to a bank will cause some questions to be asked, but beyond that, it is much easier.

2 - Bank transfers, where we do have controls around it, but the fragmentary nature of the system means those controls are only local. Does your bank KYC you? Yes! Does your bank KYC someone you sent money to at another bank? No! Does the other bank KYC you? No! It's a system of everyone looking inside their own house with a super bright spotlight but keeping the windows studiously closed minus a small crack every now and again.

3 - Securities trading & institutional transfers. Here, there is more attribution. Often there is a central clearing agent that sees everything, so yes, actually, there's a lot more control. All the individual parties might not see it, but someone does (DTCC, for instance). The question is the fidelity of that data and the layers built up on top of it (shares held in street name vs. individual name etc.).

4 - Closed internal payments networks. Here, something like PayPal does, in fact, have all the data. They also have all the customers. It's also a closed network (to get money in or out, you are likely going back to your bank). This is probably the maximum amount of visibility, but you are also captured by the owner of the network and if anything happens there, it's catastrophic.

With all of that said, how does a stablecoin compare?

1 - It has KYC/AML at the point of mint/burn. Therefore, you're going to have a lot more data than you would around cash, and probably about the same data as situation number 2 (e.g. a bank knows their customers, but not all customers from where the money originally came).

2 - Public blockchains have significantly better visibility than fragmented bank networks. Put differently, while the wallets are known by pseudonyms, it's surprisingly easy to tag many of them and you can see the entire systemic activity and all the hops. This is not possible with the bank transfer systems we use, especially as soon as you hop a national border.

3 - It is not completely controlled and every single point is not KYC'ed by a single entity like, say, PayPal. To that end, it's not as controlled as that.

Therefore, when we talk about AML/CFT/KYC obligations, I would tell you that if you think the large stablecoins are deficient compared to PayPal, I probably agree. On the other hand, if you think they are deficient compared to banks, I actually strongly disagree (at least for those making the effort, obviously those who DGAF are a different problem, but same is true of say certain private banks...). You probably have a better time identifying wallets and tracking bad actors with a public blockchain than you do with banks.

In that sense, it's highly disingenuous to go after stablecoins alone and say they are the problem when both banks that accept cash deposits and banks that allow external transfers in from non-domestic customers (or domestic customers who have ever touched non-domestic customers) are both significantly greater AML/KYC risks with higher degrees of bad activity on a % basis in those systems.

Or put a different way: If Chase takes a deposit (to pick a former employer of mine so nobody thinks I am being mean), they cannot tell you the entire txn history of that money. But it very well may have been this path:

Chase -> BofA -> offshore bank -> offshore bank 2 -> sanctioned bank -> offshore bank 3 - offshore bank 4 -> Citi -> Chase.

And yet we aren't going to say Chase has responsibility for that whole chain because they "issued" the dollar. I regard the centrally backed stablecoins the same way in terms of the responsibilities they should have, otherwise we need to ask some fundamental questions about if the current set of banks are even compliant with their KYC/AML obligations in any meaningful way.

Put differently: if we made all banks transact with each other for transfers through a public blockchain, I think they'd all be absolutely horrified at how much bad activity was revealed.

So if someone wants to complain about large stablecoin issuers not having sufficient AML/KYC, I find that credible if they believe the same about the current bank transfer system given the ineffectiveness of the travel rule and the inability of the system to see multiple hops effectively. But if you are cool with that system and not stablecoins, that's some extremely selective reasoning.

[Austin Campbell @austincampbell]

I witnessed the same behavior at Paxos; USD stablecoins were what most people desired to hold their money in.

That will remain so long as the USD is valued and the currency is well-managed. If it is not, that will change. This is the nature of all reserve currencies through time.

It also fundamentally misunderstands BTC; it's actually not that great for transacting, but works better as a store of value. We don't pay for sandwiches in gold. We keep gold in a vault, and occasionally sell off parts of it for more liquid fiat currency, with which we buy sandwiches.

I have a hard time believing crypto will be any different in the long run. There is no single form of money that is good for both liquid and deep transactions at all times and a good store of value, as those things pull in opposite directions at times (see the Fed defending the gold standard in the 1930s elongating the Great Depression).

I would also say that opting out of local systems to the dollar is still a significant upgrade compared to most local systems in many countries. Over time, BTC preference (or perhaps tokenized gold, who knows!) will grow if the USD fails at this.

What we are seeing here is the marketplace of ideas at work, @RussellOkung, and monetary preferences change very slowly... then all at once.

[Austin Campbell @austincampbell]

So I am listening to the Tucker Carlson interview of Putin; in some ways, this reminds me very much of Larry King, who used to let people speak, even unpopular people, so you could see how they thought about the world.

The fact that Putin thinks Russia's ancestral claim to Ukraine is justification for declaring war in this manner and reached back hundreds of years into history to justify it speaks volumes. I think Carlson has done the world a service by letting him simply speak his mind on this topic. It's the same sort of imperialist vision that led to the conflicts of WW1 and WW2, and it's refreshing to see the truth fall out in such an unexpected way.

Sometimes, the best thing you can do to reveal someone's motives is just let them speak. This should probably be an important lesson that sunlight, rather than censorship, is the more powerful disinfectant.

[Andrew Westrope @andrew_westrope]

Almost instantly after I complain, a bot drops in to leave a spam comment.

[Fahiemah Al-Ali @thisfahiemah]

this 4th of july i’ll be celebrating this man who died for his country

[Priscilla Li @PRISisPR]

@jshieber Tap to enlarge ... especially for the LAST 2 LINES!

[Priscilla Li @PRISisPR]

@jshieber Just the RIGHT amount of melancholy - Rilke!!!

[Priscilla Li @PRISisPR]

No kidding ... "Du im Voraus" ["You Who Never Arrived"] = my all time favorite! Of course who can forget Rilke poetry-inspired Wings of Desire, the film!!!

[✡️ Jon Shieber ✡️ @jshieber]

Holy shit. I forgot how amazing Rilke is.

[Andrew Westrope @andrew_westrope]

One of the most glaring mistakes I see people making in the debate over free speech/cancel culture/deplatforming is the absurd assumption that if people are upset, they're probably right to be. Angry mobs are wrong quite often. Especially but not exclusively if they're young.

[Andrew Westrope @andrew_westrope]

People have a right and an urge to talk, so all the YouTube channels and blogs are part of the landscape, but when the s**t hits the fan, I find I have no patience for them. No real-world experience, no credentials, I probably don't want to hear from you about global affairs now.

[Andrew Westrope @andrew_westrope]

Garry Kasparov is one of the more reliable voices on Putin and Russia on this website. A recommended follow.

[Garry Kasparov @Kasparov63]

Germany still refusing to send weapons to Ukraine after funding Putin's war machine for years, or even to remove Russia from SWIFT. Neutrality between good and evil sides with evil, always.

[Andrew Westrope @andrew_westrope]

I wondered what the distinction was, because Russia has absolutely been the source of cyber attacks against the west for many years. But I guess targeting critical infrastructure is a new level of seriousness.

[Andrew Westrope @andrew_westrope]

Hey, publications of note: Don't bombard readers with clutter.

If I open a link on my phone and immediately there's a video buffering, multiple pop-ups asking about my cookie settings, and tons of ads loading and pushing the text further and further down, I close the browser.

[Andrew Westrope @andrew_westrope]

I suspect vast inequality and victimhood narratives have cultivated this. It's a bill coming due for generations of failure to adequately share the profits of this collective project. If people feel they're not getting their cut, they give up on it and turn selfish.

[Ben Rothenberg @BenRothenberg]

To be blunt, ESPN shunting so much #AusOpen coverage off TV and onto its streaming service this year absolutely *sucks* for American tennis fans.

[Andrew Westrope @andrew_westrope]

It's often lost in the debate over standardized testing that imparting lifetime knowledge isn't really the point. Tests help measure potential: the ability to buckle down and study, focus, do the hard thing, and acquire the necessary body of knowledge to complete a specific task.