After recovering from the massive loss from the first DeFi wave, the run-in blockchain and new technologies speed up again. For business, this is a good sign. And for customers, it will be maybe the change in their traditions and daily routine how to proceed with things. Technology will become more reliable, sustainable, and flexible the more the adoption has been ongoing. The high price of Bitcoin is always a FinTec motor and the process of digitalization is ongoing. Concerns about privacy and customer protection always unheard of during a time where people are in a collective festival of fun whereas cryptos move to new all-time highs.
Millions of Dollars have been invested and it seems that everyone should be lucky. But this is the side of the medal when people start to get into self-sovereignty. This kind of freedom is not everyone’s darling. Especially not for banks and governments. The problem is deep inside: A bank was always meant to be a central institution for their companies whereas a central authority can check the books and use this information to gaining taxes, rise new taxes, and put citizens into a place where they are easy to control.
The big bang theory of a new world in money, assets, and unbanked people – Decentralization the fear of the establishment and old society
Ever asked yourself why KYC in a world where we can control the money flow with computers until the pocket of a credit card holder? There is no necessary for KYC because at the end of the day as our world is today no one accepts Bitcoin & Co as direct payment and if he does so he has a tracking company behind who handles the exchange. Companies like for example Lamium.IO create invoices, exchange reports, and more without banks and other services inside. We already know if someone has exchanged cryptos and this could be done normally with the bank but a lot of people facing big challenges to do so. Even in Europe and America banks are allowed to hold Bitcoins in Fonds, they do not offer merchant services. PayPal made a big wave but even they do not offer payments via Bitcoins for products from merchants who are connected to PayPal. So you can only exchange but not go for a merchant deal. KYC is the gatekeeper for a world of poverty not to come in.
The reality is 2.3 billion unbanked people have cash and can influence the market there are 30 billion Dollars in developing countries that can not be accessed on the financial markets because they are in cash and do not comply with the AML/KYC regulations. Using Bitcoin instead would let them participate. But this means people get a vote and this is for understandable reasons dangerous for the local government, the state, and therefore the world economy. Why? Our fiat market is oversold and swamped by newly printed money. Fresh money from developing countries will produce more liquidity and more inflation and politics played always on the limit, so a time bomb will explode.
Custody and Banks
Banks, in the beginning, started to understand that a massive volume in Crypto will lead to the same effect. The more money produced uncovered the more risk. But the more new cryptos covered by money – the higher the inflation is. That’s the reason banks always said they never will serve the customers with crypto. On the other hand, Bitcoin is shareable all over the world. It’s permissionless. No border control can stop sharing. If you are firm with Bitcoin you will understand you can’t trace Bitcoin if the user wants so and has, of course, deeper knowledge about private keys. This is a reason enough to frighten customers losing their private keys instead give them sovereignty and trust. In a custody, there is no control.
For regulators, this was the best way to find an entry point for tracking Bitcoin movements. Companies like Ciphertrace and Chainanalysis try to connect the users with their accounts and want to see what happens. Now, the Bitcoin price rises more banks are not lucky because the DeFi markets filled with 15 Billion US Dollar will also set new highs. The market cap of all just passed $1Trillion (remember the new gift from Biden to the economy will be $3Trillion) means we run in hyperinflation and no bank will pay for it allowing to stress them. India had a massive act to ban RBI do not support customers and path the way for exchanges. The Brexit becomes now the fiscal showdown. 4000 banks in Europe affected and may leave their services in the next month a stock market report predicted.
HSBC shut down servicing customers which send money from an exchange and vice versa. In a statement from the time of writing they said they concern money laundering. Same old story because how will you explain if you do not do the economy itself will get graduation for changing itself.
The danger in this point of view is: People sooner or later adopt Bitcoin as a nonexchangable good and use it as a fiat replacement.
People just have done it look at Venezuela, Colombia, Bogota, Zimbabwe, and other parts of the world f. e. South America and Indians. It started where the banks killed the support and after 11 years of skepticism people trust Bitcoin. Something you can’t deny and kill anymore. Institutional investments secured trust.
Regulators and the great reset – Bitcoin friend and devil
The run for regulations and taxation started in the U.S. – Europe created MICA to implement a big brother system and all countries started to tax crypto even if you use Bitcoin as money and not as an asset. You need licensing for services in Bitcoin, DeFi, and DLT technology. They want to keep the old world as a key keeper before you can enter. Next to the regulation, every nation tries to address crypto taxes. In general, every move is a taxable item but the reality is a bunch of regulations around depending on the state where you live even inside the US countries is self-responsible.
The reset strategy of the biggest economic crises ever by ignoring the warnings in 2008 needs a day zero in the capital society build on interest fee spiral. Means all business has to start from zero by killing the debts and the entity. Like after the 1930s and Al Capone. Old companies sentence to be done and will go for good. Millions will lose their jobs around the globe and the economy started back at a local attraction builder for services. But the digital transformation will kill the huge job motor and can’t support humans for the first time with money supply created from machine income. That’s where governments want to balance in with regulation and stop licensing companies for crypto and DLT sooner or later. The “great reset” is meant to be introducing new money and a cut in the supply chain. First, with taxation, they want to keep the benefit away from the holders of Cryptos, and in a second step, they will control everything if it is covered by fiat. This takes the benefits of a system that is sovereign away and sooner or later the attraction. In this world, everything is under KYC so it’s easy to withdraw a license by naming AML concerns. Because without names the computer shows the tracking of the money supply and finally you know there is no AML by blockchain proof.
The big reset is only a reset of the economy in the old way and forces digitalization because the cry for alternatives has become too loud. And the control should not be in Bitcoin and DeFi.
What does this mean? We will see a year full of regulations even DLT is traceable without trust, we will see more trust is created like we never have seen the paperless office but more and more paperwork. Control does not need executives. But Executives are representer and like the power of control. And like the music industry never would have been created Napster, banks never would have created Bitcoin. Believing the reset is keeping Bitcoin out of the game by inventing a government legalized coin as official payment lead people in Bitcoin selling and buying goods for Bitcoin only. Remember more than 50% of the people in the world heard about Bitcoin and also got some Satoshis or Bitcoin. Let’s have a look at the regulatory run for keeping up the old way in times of computers.
Written by : Prof. (Dr.) h. c. Joerg Molt