Is The Financial Establishment Getting Desperate?
The rise of DeFi in 2020 is truly impressive. It was reported in the last few days that the amount of money locked in DeFi applications crossed $12 billion. This is an enormous jump from earlier in the year when it barely registered a billion.
Obviously, this is putting the established financial system on notice. While the numbers are small compared to the present system, the regulators are rapidly being backed into a corner.
At the top of the list is the United States Government. Since the USD is the global reserve currency, this single country can exert great influence over the entire financial system. Banks all over the world have to succumb to their will no matter how detrimental it might be to the bank's customers.
We now see a proposal being bantered around to reduce FinCen's limits on reporting for AML purposes from $3,000 to $250. This seeks to change a rule that has been in place in the mid 1990s.
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There is little doubt that the success of cryptocurrency and the related applications, even while small, is having an impact. The established system is feeling things slipping away as alternative avenues of financial transactions crop up.
It is a situation that governments and the banking world is not accustomed to. They are not use to giving up power. Instead, over time, they just keep amassing more.
However, when things start to slip away, the tendency is to hold on tighter. We saw a major power grab take place as a result of COVID-19. This could end up backfiring as millions start to rebel.
The same could happen in the world of money. There is estimated to be around 1.7 billion people who are considered unbanked. This means they have no access to even basic banking services. The idea of sending, receiving, and storing money through a third party is not part of their lives. They still operate on a cash/barter basis.
A simple cryptocurrency wallet fulfills the most basic needs. From here, one can send, receive, and store money just like they do in a bank. It can also be done without the use of KYC/AML.
Which brings up another point that the US Government has pushed over the years. In the quest to "control" all that takes place, billions were forced into situations where they were basically starved. In many parts of the world, proving who you are is near impossible. Paperwork is non-existent making it difficult to show the proper documentation for personal identity.
Cryptocurrency does not care about any of this. In fact, crypto advocates prefer it this way.
One of the biggest benefits to decentralized finance is that anyone can participate. The challenge is that the bridge between the fiat and crypto worlds is still controlled by the establishment. This means that FinCen still has the power to override anything that is taking place.
While the world of DeFi is still immature, it is aging rapidly. Consider where we were at the beginning of the year with it. Since that time, a lot of applications popped up which has attracted the billions that are presently there. This is enhanced by the fact that the entire crypto space is expanding, with more tokens being issued on a daily basis. Led by Bitcoin, some saw their value appreciate greatly in 2020.
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On Hive, there are more people posting about how they are growing their accounts. This is something that is not just a few people here and there. Each day we can find a post how someone attained a particular level with some token. This is the mindset that is going to keep this industry forging ahead.
Cryptocurrency is shaping up to be its own wealth center. Often I discuss this concept within the confines of a particular ecosystem, usually Hive. However, if we step back. we see that the entire wealth spectrum will contain a piece that includes cryptocurrency. If it were a pie chart, right now the size of the slice would be tiny. Nevertheless, it is growing on a regular basis.
The present control agents are well aware of this. It is not a great secret. This means they are going to do all they can to maintain their relevance. If not, they will be removed from the equation, something they cannot allow to happen.
Of course, the question is whether they can stop it or not? The proposal to have any international transaction over $250 require AML tells me they are getting very desperate. Entities that are not threatened tend not to make over the top decisions. This proposal falls in that category in my opinion.
Just consider the power of Hive for a second. I was chatting with someone from Nigeria yesterday about the rate of inflation there and how it is impossible for the average person to gain any financial success. Holding money other than the national currency is not easy. Thus, people are forced into a losing situation.
If we take a look at Hive, leaving all the other blockchains aside, consider how many currencies one could hold which is outside that nation's currency. In addition to Hive, there are dozens of other tokens on Hive-Engine. All have wallets that are controlled by the individual. They also have 3 second transaction time and no fees associated with that.
Now think about this, for a second, as a remittance system. Hundreds of billions of dollars are sent by people back to their native lands. It is not uncommon for an individual to work in one country and remit money to family members back home. Unfortunately, the rates on this type of transfer enter the loan shark realm. Some pay near 20% just to remit the money internationally.
Cryptocurrency eliminates this. One can send money from any Hive based wallet to another with no fee. Of course, there is the issue of conversion to the native currency which is still a problem since, as mentioned, this is still controlled by the same entities. However, we are making progress as this industry grows.
The financial establishment, led by the United States, is obsessed with control. This is why it keeps pushing the KYC/AML at every opportunity. In the end, it has little to do with illegal activities and more to keep them relevant.
Our efforts in cryptocurrency are already forcing them into a desperate situation. Not only do they have to contend with decentralized systems but the threat that an Amazon, Alibaba, or Samsung will suddenly announce their own currency. This would seriously impact the activity that flows through the system they control.
Progress is being made and the reaction of certain institutions can be a guide to how much. When they start making rash decisions, we can conclude that they are being affected.
The next couple years are really going to be interesting.
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In Nigeria presently covid-19 has increased the rate or fee of transactions. The recent crises in Nigeria has raised inflation and while people think fiat currency is the future, I think crypto provides more stability, take for example the blockchain like hive as you have mentioned. It's free, fast and efficient and the speed is something that you can't find in a centralised system.
Companies are feeling threatened but then this shouldn't be so, the innovation that blockchain and crypto brings will benefit all and sundry
Well I will disagree with your last statement.
Blockchain and cryptocurrency is going to take out a bunch of companies just like technology always does. Disruptive forces tend to obliterate whatever is in front of them. Many will not adapt and, thus, will find themselves put out of business.
Hopefully Nigerians quickly adopt crypto. We still need to solve the on and off ramp issue.
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The desperation of the traditional financial establishment would be depening each passing day. They are aware that many are give to crypoto and other financial alternatives and they're are now promising some fake bonuses to keep customers. There are secret moves by some financial institutions to make investments in crypto in a way to improve upon their savings interests to their customer. It's all too late.
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The financial system, in its entirety, is basically a monopoly. Monopolies tend to collapse when they are faced with competition since they remain outdated. Thus, when new entrants rush in with better technology, the incumbents are in trouble.
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Seeing your transaction income reduced over time, perhaps this will set off your alarms.
It says in a press release by the Federal Reserve that the proposal entails broadening the definition of money to cover every form of money including cryptocurrency. What a ridiculous idea. Suppose you received over $250 worth of HIVE as a reward for winning some contest or something. Whose duty would it be to report this transmission to the appropriate authorities whoever they may be in the US? Yours as the recipient? The sender's who'd be non-US resident? Note that the regulators do not properly grasp that Hive is not an entity. It's a protocol as is every blockchain. Should every Hive witness fill in some stupid US form every time someone sends at least $250 worth of tokens to an American account owner or receives them? Sounds like trying to hammer a square peg into a round hole. None of this makes any sense.
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That is how regulators approach everything.
It is similar to the record companies, during Napster, suing their own customers for downloading music. It didnt work out too well for them.
Those who fight technology or try to stifle it end up getting eaten by it.
As you said, blockchain is really nothing more than a protocol.
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https://twitter.com/nobordersNB/status/1320019979379638272
I must confess that I am one of those aiming for targets and I've put my mind to stake both HIVE and LEO up to 10,000 this year. Probably it is a little bit more than I can chew, but rising the bar up keeps me grounded and motivates me to post day after day.
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This situation has been contained for decades as the central banks and elite have done nothing but taken more while diverting the burdens of their greed to the lower class. Sooner or later that bubble is going to pop, and in a big way.
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Man are they going to be interesting. Here is another hot spot that I had completely forgotten about until I saw this Tweet by BitcoinDood earlier.
https://twitter.com/BitcoinDood/status/1320729351122538499?s=19
I remember thinking, "that's not good", when that deal went down.
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Twitter links don't open. It's a Microsoft owns GitHub update.
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Sorry to be late,
On Sunday I read the article and left it in the queue, that this issue is quite controversial for me, I am talking about AML / FT, yes I read the small change of FINCEN from 3000 to 250, they are crazy, they expect me to fill out forms for every 250 that move and I will have to fill each one at all times in a few days, please us cats force us to fill this while the tigers and whales from beyond the financial system move they transfer wash through large banks and do not they are asking for nothing.
This LDAFT as we know is nothing more than a mechanism to confiscate funds by people important to others not so important and thus maintain hegemony and world order without anyone or almost no one being able to ascend the financial scale of the world order, to keep everyone who is ascending at bay.
my mdoo and all those compliance rules, well, as the law says, it bites the barefoot while nothing happens to footwear.
And now that I believe that the crypto world is on everyone's lips, they will begin to look for mechanisms to get the money from the one who is left, as someone said, and the persecution will begin to embezzle everyone who is interposing in the system that could mean a stumbling block in he.
Greetings and good to wait as the market evolves and the regulations of Fincen, FED, EU and all these guys from Wall Street.
Stay safe, Stay home.
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