Crypto rules! Or maybe not

CRYPTOCURRENCY traders, maximalists, adopters and so on are nothing if not both optimistic and impatient.

Thus it was that on Monday, the recycled Trump Presidency began amidst a flurry of executive orders and statements, none of which pertained directly to the crypto market. Result? Those same boosters are complaining he didn’t do anything.

I beg to differ. Leaving aside the launch of Trump coin, which soared into the stratosphere, we also had Melania coin, which seems to have hit TRUMP for a 60% decline. But I would argue that you could hardly have a more blatant or positive affirmation and endorsement of crypto - “I love it so much I took $60 billion from it”.

He also banned CBDCs – which in itself is an affirmation of the status quo and points to a potential use by Trump’s government of existing tokens and coins.

The more important thing is what is happening in the background. Trump had already appointed David Sacks as the Crypto Czar and as lead of the US Science and Technology advisors. He has a track record in innovation and lateral thinking and will for sure push crypto to the top of any agenda that emerges.

The SEC is temporarily under the control of Commissioner Mark Uyeda, an avid proponent of crypto, who has immediately set up a crypto task force.

At the same time, Hester Pierce - better known as “Crypto Mom”, which really says it all – has had her shackles removed and seems utterly delighted by the appointment of Uyeda, judging by her tweets.

She has been pushing for clearer rules rather than just enforcement action. As Uyeda said, “The Commission’s war on crypto must stop”.

I don’t think you can be much more pointed than that. These people will for sure change the crypto landscape from Gensler’s dead stop approach. I very much expect the XRP lawsuit will quite quickly get settled – it’s in everyone’s interests to get that out the way.

Up to now the SEC has been saying “No, I don’t like you doing that”, when there has been no actual legislation to prohibit it. Clarity here will unleash massive innovation and incredible adoption by institutions.

There is no longer any question but that there is support for crypto from the very top. There will be a crypto council and blanket attacks on crypto businesses will, I think, cease. They will focus on building an ecosystem of innovation and capital building which is diametrically opposed to where we were last week. The other thing I’m sure about is that fraud in the cryptoverse will be even more harshly treated and consumers will get better protection, which is a sine qua non for greater adoption.

Trump’s post election-day tweet of “You’re welcome” as Bitcoin exploded through $100,000 aligned him absolutely with where crypto is going and I would not be in the least surprised if the crypto reserve as mooted is created. Where America leads others follow, and – despite the EU doing its best to smother crypto – I fully expect great things from crypto innovation.

Now here’s a thing. If you know me, you know I’m a great advocate of WIR in Switzerland  (founded 1934) and to a lesser extent of Sardex in Italy. But did you know there was a previous almost identical experiment? I only just found out.

WIR was/is based on the economic principles espoused by Silvio Gesell. Two years before WIR started the town of Worgl in Austria did pretty much the same thing, and again based on Gesell. “Certified compensation bills” were created - paper money by any other name, and actually a cryptocurrency, just not a digital one.

They circulated very happily from July 1932 until September 1933 when the Austrian central bank effectively took over the town and destroyed the whole thing. This, of course, is always the reaction of those whose hegemony is threatened, which makes President Trump’s position even more interesting.

We really are at the start of the Crypto Age. As John Maynard Keynes said, “People will learn more from the teachings of Gesell than those of Marx”.