Banks must find their Crypto courage

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Banks that were hoping the cryptocurrency industry might collapse and go away are once again showing concern as digital currencies rocket higher in a new bull market. On January 1st, 2019, the total market capitalization of the top 100 cryptocurrencies was $126 billion, climbing to over $240 billion as of November 1st, 2019. [https://coinmarketcap.com/]

News cycles still love to hype up the crypto industry, just as they did during the previous boom of 2017. And banks are asking themselves – how should we react this time around?

The short answer is that banks need to wake up to the opportunities that digital
currencies and a modern FinTech marketplace offer, rather than react with fear and rejection. Banks should take the initiative and develop a solid crypto strategy for a number of reasons:

  • Сrypto has proved it is not a flash in the pan. Volatility is a feature of the market, and investors show strong appetites in the good times and solid resilience during the bad. Bitcoin and other cryptocurrencies are here for the long term.
  • Numerous crypto businesses have felt the pain of being rejected by mainstream banks but would actually be profitable clients. Previously, banks did not want to get involved because they perceived crypto businesses as being resource-intensive and risky from a regulatory perspective.
  • Lastly, global mainstream interest and acceptance of crypto will continue to grow. Utility payments and coffee purchases can now be done with cryptocurrencies. Crypto ATMs are increasing in number.

Despite this fast-growing and largely untapped market, banks have taken a more nuanced view. Their caution is driven by regulatory uncertainty.

Control over currency circulation and use is an integral part of government monetary policy, providing levers for stimulating spending and investment, generating jobs, managing inflation and avoiding recession. No government will risk giving up these tools. Despite the appeal of cryptocurrency mass adoption, regulators will always act to restrict the amount of money circulating in an economy – virtual and otherwise.

The IRS treats digital currencies as property, but with a degree of suspicion that taxable gains from the growth of cryptocurrencies have been widely underreported. Even though Bitcoin does not currently have legal tender status in any jurisdiction, it may, in the future, make more sense to tax cryptocurrencies like regular money.

The cryptocurrency ecosystem is complex and rather opaque, with masked entities acting in a financial environment that quite often lacks legal recourse. Traditional financial institutions are understandably hesitant to endorse this new market and its technology. So change seems to be gradual and incremental. But modern banks should, at the very least, have these challenges on their radar.

This is because finance and technology are constantly developing to include crypto as part of their service offer. And banks should adapt to keep up with the times. The new cryptocurrency bull market means that banks should develop strategies and offers that welcome legions of new customers from all sectors of the digital currency industry. It is an opportunity too big to miss.

If banks are cautious about publicly endorsing the cryptocurrency industry, one solid approach would be to prepare behind the scenes for future changes, rather than risk getting caught flat footed.

Beefing up security, risk management and compliance is a never-ending arms race – and not just for banks. Big players in digital currencies, such as crypto exchanges and investment brokers also take great care to comply with stringent know your customer (KYC) and anti-money laundering (AML) regulations.

Banks should become comfortable working with the leading cryptocurrency institutions because many have proved themselves adept at dealing with evolved threats and a great number now also have a track record of compliance that is just as robust as that of banks themselves. Banks should examine, integrate and streamline cryptocurrency security and compliance procedures into their own systems.

Lastly, cryptocurrencies and the underlying blockchain technology they are built on can be useful for banks in other ways – such as acting as an asset bridge to quickly resolve cross-border payments. In fact, IBM World Wire recently showed that financial institutions can seamlessly connect existing payment systems to clear and settle cross-border payments in seconds, where previously such a transaction may have taken hours or even days.

Regardless of how the markets will turn in 2020, banks must calmly assess and implement long-term cryptocurrency strategies. Those banks who continue to keep their heads in the sand will be at a significant disadvantage compared to those who embrace the future.

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The Case for a Free World: Central Banks vs Cryptocurrencies

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Most anyone with some access to media of any description, has now heard of Bitcoin. Many are also excited about the possibilities and opportunity in this now booming market. And then there are those who are involved in this ‘cryptocurrency revolution’ in a more intimate manner; and we often evaluate the blockchain world of tomorrow.

How will blockchain technology be utilized in different market sectors? What are its immediate and long-term potentials? What are the legal and societal impacts? And sometimes; How can I get rich from this? This article is not going to address these somewhat weighty topics.

Instead, this post will shed light on a dark situation, that affects every single one of us, yet very few address: The Federal Reserve’s ownership of this country (and others), and how cryptocurrencies can set us free.

In this post I will argue that a move away from debt-based fiat currency, to a decentralized community owned peer to peer smart contract currency, will unhinge the central banking system that we are all forced to endure.

What is this Federal Reserve and what is this central banking system you may ask; and why do we have to endure it? It may alarm most to hear of this public record fact: the largest banks in the world – including The Federal Reserve, The Bank of England, European Central Bank, up to the International Bank of Settlements (the pinnacle of the system) – are all privately owned. That’s right. Our country’s banks are owned by private citizens.

Our banks are not owned by governments or the populace, nor controlled by the people or governments. This is not speculation, nor theory, it is what it is. The sovereign right of the peoples of nations to mint and control their accepted currency, has been taken away by a few families. Who now own the very right to this fiction of money – that we must work, profit, borrow, spend, cheat, lie, fight over, etc. Yet these families can make it up, literally, from thin air with but a few keyboard strokes.

Want a trillion dollars United States? Sure: at interest, at debt. If you need some more monies tapped into an account to pay back these awesome monies we just invented for you, do come back and we will make you some more. Again, at debt. So where do these monies to pay back this initial interest and debt come from? From the same entity. When all money comes from the same entity, and at interest, there is no way to ever pay it back; the only option is to accumulate debt. Thus, bankruptcy and never-ending debt is built into the system: $21 Trillion of debt and growing, that is.

How did this happen? Shouldn’t the peoples of all nations have the right to mint their own ‘coin of the realm’ and not have a few families punch numbers into a computer at interest? Quite simply, it came about via a multi-generational effort of bribes, corruption, funding both sides in wars, and instilling this central banking system by default upon humanity.

Here is an example: War Machine to the somewhat mildly discontent populace of Erghmanistan:

“Congratulations! We’re bringing you ‘democracy’ by force – oh wait, we mean the wonders of central banking – hey they’ll lend you enough, newly installed government of Erghmanistan – enough to re-start after we invaded/liberated, until you go broke to the interest on this newly invented ‘money’ we provide- then we own the whole show- and in the meantime some of you can stuff your pockets while your country goes to the banksters.”

People were writing about this 100 years ago and more – about the same family owners of the fiction of money that dominate us now. Why has this continued? Well, the Golden Rule helps (i.e he who has the gold makes the rules), combined with social engineering better discussed by Noam Chomsky than myself. But the truth is out there, always has been; it is not discussed as it should be. And if the media, many outlets owned/partiality owned by these same families, continues to chase Kim Kardashian’s new handbag and LeBron James’s sprained ankle, we are never going to hear this ‘inconvenient truth’.

Solution: cryptocurrencies and decentralized systems

We need to be clear about these inconvenient facts:

Fact 1: Fiat money is only ever created at interest/debt, by the private central banks, and by private credit institutions through the wonder of fractional reserve banking: the so-called culprit in the latest GFC.

Fact 2: Fiat money is only worth anything more than paper or binary 1’s and 0’s because we agree upon it, as a society.

Fact 3: There can never be enough fiat money to pay back this debt, as it is only ever created at interest.

Fact 4: In this equation fiat money equals debt, and debt equals slavery.

So how does decentralized cryptocurrency factor into this equation? It does not. Until the banksters wrestle control of large quantities of cryptocurrency, and manipulate the markets, the most they can do is fear-monger and regulate, using the Golden Rule. They use their puppet governments to ratify legislation designed to curb the public uptake of cryptocurrencies, and utilize the media, which they largely control, to push markets up and down, to create the perceived need of strong regulation on this decentralized agreement.

We are supposedly free individuals who are happy to give their all to succeed; yet are working within a fiscal system not of our devise nor control: a system where a large portion of our earnings goes to pay an ongoing odious debt. So what options do we have as a populace?

Cryptocurrencies are a form of rebellion. It is challenging the power of these families and the very fiction of money that they own. Cryptocurrencies are rebutting the system of centralized control of all trade, and providing a decentralized means of trade, outside these banksters’ control.

Also, I have long been a fan of time-banking: a means by which individuals, even corporations can trade goods and services, without fiat currency. They can bank the time/credits they accumulate and use them to purchase goods and services from any other provider involved in the network. Now, with the advent of cryptocurrency we will see time-banking and crypto evolve into one. We will no longer have the need to borrow money at debt, from these families who can make it up out of thin air.

My family and company (Wide Awake Media) are proud to be at the forefront of this revolution; for with media lies the power to alter the discourse of humanity. Fake News is done. It’s time for Truth Media, and it’s time for rebellion.

The world is waking up in droves, and we aren’t happy being slaves.

Sources:

  • “Economic Warfare: Secrets of Wealth Creation in the Age of Welfare Politics,” Abdelnour 2012, Wiley & Sons
  • ‘The Money Masters’
  • ‘The Secret of Oz’ -William Still
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Bitcoin: Drawing the Line Between Investors and Gamblers

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People who bought and held their .01 bitcoins from 2010 could have enjoyed an increase in value of 119,999,900 percent. If you spent $100 on the most popular digital currency then and didn’t sell or lose your fortune to hackers, your electronic coins might be worth about $120 million today. Those are pretty incredible returns, and few people regret buying a few bitcoins back in the day, holding onto them, and reaping the benefits. Of course, none of that offers any guarantees that the value of this or any other digital currency will continue to rise like this or even continue to increase at all.

Is Buying Bitcoin Investing or Gambling?

In fact, it’s possible to argue that the very thing that maintains today’s value is past performance. As you should know from reading any prospectus, past performance doesn’t ever guarantee future returns. If you can afford it and want to spend some money on digital currency, that’s your choice. However, you really should first spend some time considering what it really means to buy bitcoin.

When you buy some bitcoin, are you investing or speculating? In order to figure this out, you first have to decide if bitcoin qualifies as an investment. This question usually sparks a lot of contentious debates among people who are considered financial experts. Aswath Damodaran teaches at NYU’s Stern School of Business. He’s often referred to as the “Dean of Valuation” for his work valuing various assets.

Professor Damodaran divides all investments into four main categories:

  • Assets
  • Commodities
  • Currencies
  • Collectibles

He says it’s easy to dismiss digital currency like bitcoin as an asset, commodity, or collectible. This digital currency doesn’t generate income on its own like a rental property, an asset that you can touch. You can’t consider bitcoin a raw material like a commodity. It certainly isn’t a collectible.

If nothing else, Damodarian is willing to say that bitcoin might be a type of currency, but he also has gone on to comment that bitcoin isn’t a very good currency. These are some reasons that bitcoin hasn’t yet become a good currency even if it might be loosely classified as one:

  • It’s not that easy to trade nor commonly accept by most vendors.
  • If you do find vendors who accept it as payment, they probably won’t give you an actual price until the moment you want to make a trade just because the value is very volatile.

If bitcoin is an investment, it’s hard to classify. You might call it a currency just because it really isn’t anything else.

Professor Damodaran is not at all a fierce critic of electronic currency and doesn’t believe it’s any sort of fraud or Ponzi scheme. He just says it’s impossible to value right now. You can only trade it or price it. You can find many tougher critics than Damodaran, so it’s worthwhile to consider the words of a fairly unbiased scholar and recognized expert in the field.

He does say that if future technology makes it easier to spend bitcoin or other electronic currencies, he might offer a revised opinion. Still, it might be that blockchain technology and not the electronic currency that really has the value. If that’s true, another electronic currency or even a different kind of technology could replace bitcoin.

Should You Regard Bitcoin as an Investment or Speculation?

Just as you know, you should never sell in a panic, it’s also prudent to be wary of buying in a panic. Right now, you might regard bitcoin as something that’s interesting to study or even risk whatever you can afford to lose. If you want to invest in order to secure your retirement, earn profits, or meet other financial goals, you should probably look for something that’s easier to classify as an investment. More important, you will probably be prudent to find an investment that’s easier to value.

If experts are having a hard time telling if or when this will all come crashing down, it can be easy to see this as a gamble. Some people are fine with putting their savings on the line in hopes that things will go the way they guess, but more savvy investors will typically take the “boring” route and put in the hard work required to ensure their financial growth.

Now you know

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