May 25, 2021: State of the States 🇺🇸💵
DC ponders stablecoins while states compete for crypto.
US tax day has come and gone. This year we also got a crypto crash, so Americans could not only lose money, but also enjoy compounding their losses.
Outside of taxes though, the regulatory perspective in America continues to develop. Obviously we’re hoping to nudge it in a smart direction.
Federal
At the federal level, we’re seeing more commentary about stablecoins. Unfortunately, it’s not yet the tone a strategically shrewd government would adopt. They focus too much on the potential risk of stablecoins, as if the early guinea pigs in DeFi don’t already spend all night and all day evaluating depeg risks.
We’ve long argued that the USA’s optimum strategy is not to shun existing stablecoins, but to hug them as tightly as possible. Dollarcoins already dominate DeFi. Cryptocurrency builders have built the world’s greatest advertisement for the US dollar. What’s that saying about gift horses? No sense trying to ban and rebuild from scratch. Simply lean into this marvelous infrastructure.
There’s zero sense in trying to engineer and launch an official CBDC from within the government. China’s government is more efficient than America’s and they also have more capability to force their citizens to do whatever they demand. If they can’t figure out how to bootstrap a digital yuan, what hope do we have?
Why not simply build more rails between Washington DC and USDC? USDC is already widely popular and has all the censorship capabilities so coveted by the authorities. Instead of pumping billions into the IRS to crack down on crypto, just create wallet addresses to interface with the authorities and watch what happens.
On other regulatory fronts, the institutional activity around Bitcoin continues to trend in an encouraging direction.
Meanwhile other proposals left us speechless
State and Local
Fortunately for the US, federalism allows much more flexibility for regional jurisdictions to experiment and innovate. Whenever some states make progress, other states have to react to compete. DC catches up several decades later.
Wyoming is one such state that’s competing intelligently.
It’s also encouraging that Wyoming Senator Cynthia Lummis is in DC to help steer policymakers towards more intelligent outcomes.
People don’t often recognize it, but Wyoming has a proud history of being ahead of the curve on societal trends. Wyoming was the first place in the entire world to grant all women the right to vote as far back as 1869, half a century before the country would come around.
Although Wyoming doesn’t yet have a reputation as a hub for techies, the timing of its move is quite opportune. New York and California are flagrantly self-immolating. Wyoming’s innovative legal DAO framework is already causing chatter, both serious and silly, among cartoon finance kingpins.
Of course, Wyoming faces stiff competition with other friendly jurisdictions. Mayor Scott Conger is putting Jackson, Tennessee on the crypto map.
Florida in throwing a lot of its weight into the space. In June it gets additional momentum from hosting one of the first in-person Bitcoin meetups in as long as people can remember. Sadly, the meetup’s somewhat scaled back somewhat due to market conditions.
If we had one wish, we’d hope for more blue states to embrace this movement. We don’t have any particular partisan affiliation at stake here. We simply prefer that cryptocurrency avoids being viewed through any politicized lens. Crypto doesn’t care who you vote for. Yet in the US whenever anything gets lodged into the politics echo chamber, progress gets short-circuited and even rudimentary human comprehension is inhibited.
Fortunately Chicago is showing signs of stepping up and embracing DeFi. It’s too early to say whether this is a legitimate movement or merely a paid press release in a news service getting rekt by the growing Rekt empire. At any rate, we’re hopeful that Chicago can become the blue angel of DeFi.
Grassroots
On the more grassroots side, we saw a push for centralization of Bitcoin from Popeye the Saylor man and he-who-we-do-not-name.
We see it as little more than a reconciliation following a rather public bits-measuring contest between the boisterous billionaires. The Bitcoin decentralization advocates were mostly unimpressed by the theatrics.
For more info, check our live market data at https://curvemarketcap.com/ or our subscribe to our daily newsletter at https://curve.substack.com/. Nothing in our newsletter can be construed as financial advice. Author is a Curve maximalist, and among fiat currencies is long on the US dollar.