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  • We'll talk about politics.

  • Let's finish with this on stable coins.

  • That seems to be what they're going after now in their crosshairs again, you know.

  • Gary calling them poker chips, New York times article yesterday said 75% of all transactions are with a stable coin.

  • And again it seems like the direct threat to the bank deposit.

  • Tell me about stable coins that didn't really exist a couple of years ago.

  • They didn't now they are together and it was a bunch of them and a bunch of them and there are the highest volume instrument traded in the Blockchain and they're probably the reason why so much liquidity is here and now it seems like they will be the first regulated focus because Bitcoin, I had Michael Sailor on the show and he's got $5 million a Bitcoin on is public company balance sheets.

  • And he said I like Bitcoin because it has low aspirations.

  • Bitcoins not trying to change centralized finance.

  • All it wants to do is a store of value, it's not gonna be programmable and I'm happy to invest in it.

  • But the stable coins, they are trying to eat the lunch of psi phi So well a couple of thoughts now, first of all, you know those being called poker chips, it's not a legal category that doesn't mean anything.

  • The more interesting thing is that Gary Gensler considers stable coins to be a security and in the United States not to get too technical, but there is a test on house on whether something is security called, how it has everybody.

  • Encrypt has heard about it.

  • Tell us about uh it is whether it is a common enterprise uh for the profit by the f a for profit by efforts of others And with the expectation of profit, uh profit for profit for return.

  • So, you know, and it has to take all $4 to be considered a security, but it has, it can be three of them.

  • And if it's not the fourth one or either one, if it's not, then it's not a security.

  • Now, how exactly do you expect to profit from a stable coin?

  • If it's 12 unpacked with the dollar?

  • You know, I understand why ethereum might be, or uh you know, some of the tokens because you know that you have a company, it's putting in the work is the infrastructure you expect to make money.

  • But something that's pregnant one to the dollar, there is inherently no expectation of profit.

  • Right?

  • So that that is, that is a curious thing to say.

  • And but ultimately, the other day, you know, the authority of what security and what's not a security is the sec.

  • And if you disagree with them, we've got to take them to court and I'm not gonna do that personally myself.

  • I was hoping that perhaps coin based might there, but it will appear they're not gonna do that either.

  • So I think might the thing, the other thing that's curious is what you said, you know, You're trading, you know, the other, the market, you want to trade out, you go into stable coins early on during the 2017 boom.

  • You know, you were trading the different assets you and your base currency was always Bitcoin.

  • That was why one of the reasons why we saw the huge run up in 2016, when volumes picked up and people use that as the currency of account.

  • Now that is stable coins.

  • And then the other thing is that you see a lot of trading in markets that don't have access to great banking systems or have currencies that are prone to the basement, you know, printing like in Zimbabwe or Nigeria or even Turkey, quite frankly, you know, there's inflation fears that are running wild and they come to fruition.

  • So you know, you have something like the border of china and Russia where they do trading in stable coins now and I understand why this might be of concern, but banning it outright doesn't solve the solution.

  • I mean, the number one currency of choice is the United States dollar.

  • And more often than not large scale money laundering occurs from the banking system, we haven't thought about abolishing the dollar and the banking system.

  • So applying that to crypto how does that solve the problem.

  • Yeah, if you look at most of the money laundering, it happens where most of the money is, which is in the banks, especially the ones that pay the fines every year, like HSBc for all their money laundering violence, but you nailed it here.

  • It's about the incentive as long as you can make $10 billion as a banking institution and then you settle with the doj or whoever for 1/10 of that and there's never been criminal prosecution or hardly ever.

  • It's all civil.

  • What exactly is the incentive for you to stop?

  • Yeah.

  • Yeah.

  • I think Brian, it was just saying that uh 1% I think of all crypto is attributed to money laundering and illegal dealings.

  • Whereas 3-4% of the US currency is considered in that as well.

  • I'm sure there's money laundering in glasses, you know, drinking cups, people having 0.1% of all transactions being done in something that's not even money.

  • And also the majority of stable corn trading is probably taking out taking place outside the us anyway.

  • So be always curious to see what would happen.

  • Um, let's just finish off with best case and worst case scenario, say 12 months, 18 months from now say Gary just goes crazy and decides, I'm just going to take all these people to task or Gary.

  • Um, just decides to take a snooze for a couple of years.

  • Like what do those two realities look like for us?

  • Well, let's start with the worst off and end on a positive note.

  • But uh I think they're very focused on the urn products, they're not concerned about the other aspects aspects, even though some currency exchanges, I'm going to face some challenges because like I'm going to get too technical again, but very briefly, what do I think?

  • It's interesting?

  • I don't know, you tell us after how the viewers, but you know, with current uh there's so many tokens that you cannot go after individual tokens, you cannot go 5000 probably right now.

  • So you any regulators limited resources, so what they're doing or appear to be doing, they're focusing on the trading venues and saying, we're not gonna go after X, Y.

  • Z coin, but we're going after you because this might be security and your trading security and you don't have the license to trade security.

  • So this has been sort of because brian and Coinbase have been so vocal about the land product, this has been pushed back, but it's very important because that might come back to bite us and uh you know, in the sense that venues might get shut off, you know, just trading activities, they have to register as you see a registered broker dealers.

  • We, by the way are buying one in the United States.

  • Uh so, you know, that's how they'll stop the trading of it.

  • You can actually go after the coin, you go off, there are exchanges on.

  • Yeah, and that's where that has been in the speeches, but it hasn't taken the headlines, it's the landing product, but it's curious to see, and that could affect negatively, uh, in the midterm short to mid term and then we'll figure it out.

  • You know, everybody was gonna get broker licensed or, you know, trading, but it will go off short.

  • That's the downside if you keep innovation out of state, so just go somewhere else, it doesn't disappear.

  • And then the other thing would be, you know, for, I think this will have more repercussions for the general public.

  • They wouldn't have access to high yield earning products, so it will be a net loss for for, you know, the customers and the clients and the investors and the consumers itself more than the companies because the companies, you know, they uh worse comes to worse, they don't need to pull out of the United States.

  • But I don't think that something has been done so terribly wrong to, you know, have criminal indictments or anything like that for the vast majority, like, okay, clear scam and frauds.

We'll talk about politics.

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Are Stablecoins Eating The Lunch Of CeFi? ? Antoni Trenchev On Stablecoins & Securities

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    林宜悉 posted on 2021/10/15
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