January 21, 2021: A Look at Features and a New Administration 👀 🦅
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Out with the Old
With a new administration taking over, what do the tea leaves say about regulatory changes and how it could affect the cryptocurrency space?
For starters, outgoing OCC comptroller and clear frontrunner for the Economics Nobel Prize Brian Brooks took to Twitter with a thoughtful must-read thread about trends to expect.
Throughout the thread he displays a prescience and deep understanding of many of today’s most exciting trends. He refers to DeFi as “necessary” and cites the role of non-depository banks in protecting customers.
We’ve lauded Brooks before, as he clearly grasps something most regulators don’t recognize: the existence of stablecoins don’t undercut but rather reinforce the value of their counterparts. If we want the dollar to be strong tomorrow, we must encourage an ecosystem of strong dollarcoins today. As he eloquently writes:
“Stablecoins? Scary to some today but necessary tomorrow if we want the dollar to remain a competitive global medium of exchange.”
—Brian Brooks
Literally no human being alive wants a stableyuan. You can’t even wipe yourself with it.
In With the New
However, just because the old guard gets it, what about the new guard? For one very promising sign, the incoming Biden administration paused Steve Mnuchin’s odious rule targeting “unhosted” cryptocurrency wallets.
We’ve criticized these misguided rules for the harm they are likely to do to the economy and America. It’s a wonderful sign to see the incoming administration is interested in reviewing and possibly reversing these decisions.
The appointment of Gary Gensler as SEC chairman is another positive step forward. Gensler deeply understands cryptocurrency — in fact, you can even watch his thoughtful lectures on the subject as part of the MIT OpenCourseware Catalog. Many are optimistic that he can use this understanding to intelligently police bad actors in the space, as opposed to the scattershot and reactionary approaches of yore.
The biggest red flag, however, is that incoming Treasury Secretary Janet Yellen appears to have a crude and poorly informed opinion of the industry. For an administration that claims to care deeply about “facts,” it must be deeply embarrassing to have their incoming Treasury secretary using her pedestal to spread outright falsehoods and fake news.
Additionally, Yellen claimed to be entertaining the radical and disastrous approach of taxing unrealized capital gains on cryptocurrencies as a way to shore up the dollar. Instead, intelligent people interpreted this as signal of weakness and a surefire way to harm the dollar further.
Hypocrisy is de rigueur among politicians, but occasionally a signal that the subject is merely underinformed and learning.
With more people recognizing the optimal strategy for America would be to leverage innovation in cryptocurrency and DeFi to our benefit, we’re hopeful Yellen is similarly nudged by her advisors towards strengthening our country.
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