I don't know the answer which is why I'm asking. I've heard central bankers and finance ministers criticising crypto and warning people about the risks of investing in it. But I haven't heard any acknowledge, in public, that it poses an actual risk to their financial systems. If the crypto market continues to suck in capital, and grows to tens or hundreds of trillions, does it pose a serious threat? What, if anything, could Governments/central banks do about it?
It is useful in the global south as a payments network for the unbanked who do not have access to dollars as the central bank is hoarding them.
The crypto currency market is like the Wild, Wild West where there are no rules. Take note, just because people are still able to trade it without pretty much any regulations, does not mean that the Federal government is not watching you. They already arrested some people for drug dealing and forced some people to surrender their crypto currency. Now, no details on their innocence or guilt and the actual charges but, the government confiscated their Bitcoin and I assume they lost every last cent they had. Yeah, the Federal government is affraid of those handling crypto currency? Nah. Not even close. You should watch yourself if you own any crypto currency. If you get involved in any crime while, trading crypto currency even if you are an innocent bystander, you could have adverse, unexpected consequences.
Yes. It is a very real threat to governments. If governments cannot control the currency, the FED is without most of its weapons and the government is losing one of its greatest "taxes", inflation. So there is no way they will let crypto outcompete the currencies. They have already started to talk it down and saying its mostly for criminals and so forth. Soon its main purpose is going to be financing terror according to the MSM and the politicians. Just wait. Then it will be harder for owners of crypto to get normal banking services, as the banks are taking "anti money laundry" precautions. And so it will go on, before it gets banned, and owners of crypto might be charged with terrorist financing. But by then, most "normal" people are out. This will take years and go gradually. But it is already well on its way...
The current crypto market has a total capitalization of just over $2 trillion, of which BTC accounts for half ($1 trillion). If it went up another 10-fold it would equal US GDP ($20 trillion). If it went up 20-fold it would equal the size of the entire US stock market ($40 trillion). I imagine that Governments and central banks, around the world, might be just a little concerned if it got anywhere near those kind of levels. The question is, what could they do to curb it?
Crypto doesn't pose a threat to governments and financial systems. It does pose a threat from the standpoint of it being an asset bubble (people may lose a ton of money and create a run on crypto-"bank" institutions, causing further distress and requiring government intervention). You can earn your pay in cheese and still owe taxes in USD. You convert your surplus cheese into USD and pay it.
It's comments like the above that makes me keep buying more and more Ethereum. You guys don't seem to get it, you're fixated on price and bogeymen, when you should be looking at the real elephant in the room, which is DeFi and what it brings to the party. One big massive recking ball to legacy finance. To even suggest that the heavy jackboots of US regulation will get in the way of that is ludicrous. Sure, they'll probably try but it will just be another failed action from a slowly failing state - the 2 go well together. If any bank or finance company doesn't have a DeFi strategy for the next few years they're going to wake up one morning (and in less than 1 year) and understand the reality of the new digital economy. It won't be pretty for them. ---------------------------------------------------------------------------------------------------------- Interesting case in point, the new Lumber market offered by FTX. It probably takes the existing CME/NYSE gang at least a year to even think about listing a new product. So many meetings, so many papers, so much legal work, so much arrogance, so much bullshit basically. So what do FTX do? They say, hey, our clients want to trade Lumber and in less than 1/2 day they've listed the contract and it starts trading. The above is not about Lumber per se, it's about speed, agility, forward thinking, action, really helping clients and so on. NO legacy finance can compete and it's only going to get worse for them. As for FTX and most of the other crypto brokers, they don;t really care about US regs because they don't accept US clients which is a direct result of the heavy jackboots of the US government hence it proves just how innefective US regs are (in the new DAE) and just how much damage they do to the US electorate. The world is far far bigger than the US so the more they fight, the more the world moves on without them. PS. This and my other posts are not digs at Americans, I like 'em. The negativity is always directly at the awful politicians and their awful policies.