3rd May 2022 > > Politics and cryptos.

tl;dr

Why is there politics in cryptos?

Market Snap (at time of writing)

Market Wrap

BTC going nowhere fast for now as yields threaten to break another big figure. Stocks had a bit of a seesaw day, hurting day traders on both the long and short side.

Curious Cryptos’ Commentary – It would be good to take the politics out of cryptos I

But some people just refuse to allow us to do exactly that.

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Joe Biden has recently published an executive order (see CCC 8th March 2022) which stated:

"The order will direct federal agencies to examine potential regulatory changes, as well as the national security and economic impact of digital assets."

The CCC is very welcoming of such a document, but of course there are risks to the downside if this platform is used to try to restrict the adoption of cryptocurrencies, though such adoption is for the wholesale benefit of mankind, particularly those who are not of the political or financial elite.

A recent letter has been sent to the Environmental Protection Agency (EPA) asking for increased oversight of proof-of-work cryptos, of which the largest is BTC itself. The EPA was one of the federal agencies specifically named in Biden’s executive order, and of course it is right and proper that individuals make their concerns known as the regulatory landscape changes and develops.

But it appears to an outside observer that this letter is simply an attempt to obstruct and denigrate the nascent crypto industry.

Twenty Members of Congress signed this letter citing "concerns regarding reports that cryptocurrency facilities across the country are polluting communities”:

https://huffman.house.gov/imo/media/doc/Crypto%20letter%20to%20EPA%20FINAL.pdf

One of the signatories is Brad Sherman who believes that the US should implement an outright ban on purchasing cryptos, though such an ambition is not only impossible to achieve but will simply result in the flow of crypto tax dollars moving elsewhere in the world.

It is unfortunate, but true, that it will come as no surprise to anyone that all twenty signatories to this letter are Democrats.

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In the interests of a balanced approach, you might be interested to read the response sent by some admittedly very biased crypto enthusiasts:

https://bitcoinminingcouncil.com/wp-content/uploads/2022/05/Bitcoin_Letter_to_the_Environmental_Protection_Agency.pdf

I do recommend reading this letter. It makes some interesting comparisons between proof-of-work (POW) and proof-of-stake (POS) cryptos, a debate which will probably last much longer than my lifetime.

The letter also summarises the key arguments in the debate about the incremental energy usage of cryptos. Again, a debate which will probably last much longer than my lifetime.

Curious Cryptos’ Commentary – It would be good to take the politics out of cryptos II

The CCC has recently reported on the rather tremendous regulatory development in the EU occasioned by the adoption of Markets in Capital Assets (MiCA) - see CCC 14th and 15th March 2022 amongst others.

On the 22nd March 2022 we saw the first shot across the bows by Fabio Panetta, a member of the Executive Board of the ECB, who reports to Convicted Criminal Christine Lagarde. He stated:

“We need globally coordinated regulatory action …” in an exact parroting of previous utterances of his boss.

I get tired and bored of repeating what is self-evident to anyone outside of the bureaucratic elite, but here it is again.

Allowing for competition will always result in a better outcome, and that applies as much to regulation as any other form of human activity.

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The European Union's financial services commissioner, Mairead McGuinness, has called for a new "global agreement on crypto", wearingly depressing words which come as no surprise to anyone.

Personally I believe that comment is shorthand for “let’s all ban cryptos in case we lose control” but it is true I am sceptical of the technocratic elite.

In justification of global regulation, once again McGuinness trots out the dated trope show – environmental degradation, criminality, sanctions evasion, and financial instability.

What is scary is her desire that:

"… no product remains unregulated."

Where does that end?