Politics Crypto risk-takers aren't crazy — they're just desperate

10:40  16 september  2021
10:40  16 september  2021 Source:   thehill.com

climate friendly than Bitcoin: Cardano starts in Japan by

 climate friendly than Bitcoin: Cardano starts in Japan by The lesser known cryptocurrency Cardano has managed behind Bitcoin and Ethereum to third place of the largest cyber foreign exchange. This can include the listing on one of the strictest in the world stock markets has helped. © Contributed by Finanzen.net Servais Mont / Getty Images Cardano is listed on the Japanese stock market crypto Sharp regulations met Cardano as green Bitcoin Alternative Cardano has made the leap to the Japanese stock market.

As we've learned the hard way, social media has become a viral force for pandemic-scale political conspiracies. Of course, it's not the media themselves that do this; instead, it's the rage many Americans harbor against governmental institutions profitably enabled by social-media colossi.

a group of people standing in front of a crowd: Crypto risk-takers aren't crazy — they're just desperate © Getty Images Crypto risk-takers aren't crazy — they're just desperate

It's thus unsurprising that companies such as Facebook, which grew to omnipotence fueled by social anger, understand better than establishment financial institutions that economic anger is also growing at an ever more feverish pitch. As a result, what I'll call viral finance is spreading through every corner of the once staid banking, payment and investing infrastructure.

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 30 Dollars for the start: Bitcoin is now means of payment in El Salvador El Salvador is now the first country in the world in which the crypto currency Bitcoin is legal means of payment. Before the start, the country had bought 400 Bitcoin. The BTC course rises. © Mehaniq / Shutterstock El Salvador: Bitcoin is now official means of payment. At the beginning of June, El Salvadors President Nayib Bukele had announced to allow Bitcoin as legal means of payment - as the first country in the world.

Crafting a new-age financial regulatory framework thus requires a keen understanding not only of how crypto assets work, but also why they work so seductively for the millions now putting their life savings at risk not because they don't know better, but because they can't do better any other way.

As most clearly voiced in the meme-stock frenzy, rage against financial institutions is generally directed at "Wall Street." Crypto assets and the fast-growing decentralized (DeFi) infrastructure are also at least as much about circumventing those deemed to control finance for their own benefit as it is about innovation, inclusion, or any of the other attributes advocates often espouse.

But there's an even more compelling motive behind new-age finance than anger: Desperation. The current savings rate at an insured depository is 0.06 percent. With inflation now hitting at least 5.3 percent, anyone without significant assets still hoping to save for the future has no choice but to gamble in the stock market or speculate with crypto assets.

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 Whom is Dogecoin? Billions-heavy struggle for trademark rights. Several organizations are intended to claim the rights at the hypothes of fun currency Dogecoin. Apparently the Dogecoin Foundation forgot to register the brand. © Shutterstock.com Gear Re To the brand Dogecoin. Jackson Palmer, who founded Dogecoin 2013 together with Billy Markus as a parody of the Bitcoin, has been no longer a fan of crypto currencies. Most recently, he confrished the digital money as "rights, hyper-capitalist technology".

Securities and Exchange Commission Chairman Gensler has prioritized reforms to trading platforms that make investors pawns, not the kings they fancy themselves to be in a video-game-like battle against bigness. However, U.S. bank regulators have so far taken no action to address the risks crypto assets pose to vulnerable consumers. A "sprint" is now underway to target crypto in general and stablecoins in particular, but the hard fact of this urgent matter is that the activity most likely to persuade investors to undertake crypto asset strategies are the investment, lending and trading activities most likely to attract vulnerable consumers. Although they are relatively poorer than most other groups, Black consumers are at least twice as likely as whites to hold crypto assets, with 61 percent of "marginalized" households saying that they are interested in crypto assets because traditional finance doesn't work for them.

Why Does the World’s Largest Crypto Exchange Keep Losing CEOs?

  Why Does the World’s Largest Crypto Exchange Keep Losing CEOs? It’s not even clear who is running Binance’s U.S. arm now.Brooks was coming out of a term as the Acting Comptroller of the Currency, where he ran the federal agency that charters and regulates the country’s banks. He assumed that position after several stints at other regulatory bodies and as chief legal officer of Coinbase, the newly public crypto exchange. He was, in other words, exactly the sort of guy you’d want on your team if you were, say, girding yourself for an onslaught of increased regulatory scrutiny for crypto — which new Securities and Exchange Commission chair Gary Gensler seems to be telegraphing.

But, despite the need for urgent consumer protections, the regulatory sprint faces very high hurdles given the anachronistic definitions of deposit-taking, payment services and lending, on which their rules must rest. There are some steps the agencies can, and I think will, take. Indeed, they've already taken a big one in a little-noticed proposal demanding that any entity with which a bank does crypto-like business abides by bank safety-and-soundness and consumer-protection standards. U.S. agencies will also quickly act after global regulators finalize proposed, tough capital standards for higher-risk crypto asset exposures.

These are worthwhile efforts, but they will prove limited at best. The premise is that banks still hold the key to the most lucrative corners of the financial system. This is already wrong when it comes to many forms of lending, critical payment services and more, even deposit-taking. DeFi also aims at breaking the entire edifice of traditional financial intermediation and could well succeed in remarkably short order.

Get amazed by exploring these fascinating properties of bitcoins

Get amazed by exploring these fascinating properties of bitcoins Are you aware of the fact that there are more than 5000 different digital currencies available on the internet? But the only crypto that has been entirely successful with millions of active investors around the world is bitcoins. Bitcoin is a top-rated digital currency that was launched in 2008 and went through multiple revolutions.

New law is thus already overdue to protect vulnerable investors, savers, payers, payees, and borrowers. Reforms along the lines of what a U.K. regulator recently proposed are also essential to ensure that social-media financial messaging is far more truthful than any of the rest. We know it's damaging when social media persuades Americans not to get a COVID shot, but it will prove at least as risky if this message also entices those with scant resources to part with them in hopes of what are almost always illusory gains.

However, new rules and even new law will achieve limited risk reduction as long as the fundamental force driving savers and investors into despair - and then to anger - remains unaddressed. Things won't change unless and until the Fed begins to recalibrate interest rates to favor average savers, not high-wealth investors.

When no one can save for the future, even those who shouldn't will speculate when they encounter someone who is ready to take their money and promises riches to come. They have no choice.

Karen Petrou is managing partner at Federal Financial Analytics, Inc. She is author of "Engine of Inequality: The Fed and the Future of Wealth in America".

Fossil fuel firms find friends in Bitcoin mining .
“When people don’t see pollution, they don’t think it’s there,” one expert said.Today, through a holding company based in Kennerdell, Pennsylvania, called Stronghold Digital Mining that bought the plant, Scrubgrass burns enough coal waste to power about 1,800 cryptocurrency mining computers. These computers, known as miners, are packed into shipping containers next to the power plant, the company stated in documents filed with the U.S. Securities and Exchange Commission ahead of its initial public offering. Coal waste is a byproduct from decades of mining in the region, left behind in enormous black piles.

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