BBBBBBBBBitcoin has been on a run recently with its quoted price as high as $28,288.84 on 27 December 2020. The total value of all BTC is now flirting with half a trillion USD.
Huge consideration — there will only ever be 21,000,000 BTC. Constrained supply in the face of increasing demand? What does that suggest with an Econ 101 beanie on?
Highest price BTC, 27 Dec 2020 – $28,288.84
Lowest price BTC, 5 July 2013 – $65.53
If you have been into BTC for a long time, you likely have a big smile on your face.
The question for today is this — Does this run up in price draw more attention and, therefore, more regulation?
Of some small note is HR 6514 The Crypt-Currency Act of 2020 which was introduced on 9 March 2020 and has gone . . . . . nowhere.
That is a hard-to-impossible question to answer. I offer three issues that may be illuminating:
1. The United States Securities and Exchange Commission has been aggressive in classifying cryptocurrency as a security. They have won a number of such cases and have teed it up with XRP in the last few days.
Established crypto exchanges have dropped XRP as they cannot trade “securities” which is what the US SEC contends is the correct status of XRP.
2. On 18 December 2020 (a Friday afternoon), the US Treasury proposed a number of rules which would require reporting of — including the identity of those involved — crypto transactions equal to or in excess of: $10,000 un-wired, $3,000 wired.
This rule obliterates any idea of anonymity for the world of crypto. The notion of anonymity is a core element of the BTC and crypto mystique and, arguably, makes it more mainstream, making it nothing more than a digital USD.
Perhaps. a digital USD is where crypto settles out?
The rationale of this new rule is to create parity with the US banking system (which since 1970, half a century, has had to adhere to such cash reporting requirements) and to dampen the use of crypto by criminals including ransomware thieves.
Halt for just a second, please: The use of crypto for illegal reasons is the primary objection from the regulatory environment, law enforcement, and national security establishment (international sanctions).
It is the freakin’ herd of defecating elephants in the room. This has to be dealt with and until it is, crypto is a sideshow. Not everybody agrees with that view to be sure, but it makes sense.
The UST wielded a broader brush including tax evasion, terrorist financing, weapons proliferation, sanctions evasion and transnational money laundering, as well as to buy and sell controlled substances, stolen and fraudulent identification documents and access devices, counterfeit goods, malware and other computer hacking tools, firearms, and toxic chemicals. In addition, ransomware attacks and associated demands for payment, which are almost exclusively denominated in CVC, are increasing in severity.
The U.S. Treasury Department proposed sweeping new rules late Friday (Dec. 18) that the government says would make convertible digital currencies like bitcoin less attractive to criminals engaging in crimes such as ransomware attacks.
The new regulations, if adopted after a comment period (which the Trump UST has made unusually short suggesting this is an emergency situation — to which the crypto Illuminati cry “foul”), would require banks and some other institutions to obtain and report the identities of parties engaging in certain digital transactions, including payments involving what are called “unhosted wallets” – effectively secret bank accounts that hold cryptocurrency.
The new rules require financial institutions to report such digital transactions in the same way they have been required to report cash transactions since 1970.
The proposed limits for reporting digital transactions are $10,000 for non-wire transactions and $3,000 for wire transactions – the same as with cash.
3. Before one wishes for a Biden admin to hold the whip hand over the fate of cryptocurrency and BTC, in particular, know that many Dem congresspersons have demanded more stringent regulation of crypto.
It would be perfectly fair to say that the incoming Biden admin is more beholden to traditional banks than the Trump admin. Banks are generally opposed to anything that lessens their oligopoly control of finance — which is reflected in the nature of the cash reporting changes promulgated by the US Treasury.
Of course if the banks get their chance to exert control over the crypto market, then they will have a sudden change-of-heart.
It is important to stress that while crypto still struggles to find a “killer app” raison d’etre, it has become pretty damn mainstream with places like PayPal providing the ability to transact business using BTC.
I have no dog in the fight other than being opposed to making life easier for criminals, drug dealers, human traffickers, spies, malfeasors, Communist countries, sanction avoiders, and other scumbags.
Be well and countdown until this rotten MFer of a year 2020 is over and dead.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.
