It’s September, the height of the political calendar and this year, for the first time, global politics has made its way to our space as digital currencies grow to a $150 billion market.
The most striking example is Mario Draghi, the current President of the European Central Bank, who told Estonia: “no member state can introduce its own currency.”
That was in response to Estonia’s plans to issue an ethereum based token following an ICO for their 20,000 e-resident, but Draghi told them that “the currency of the euro zone is the euro.”
Just how much weight his words will have remains to be seen as we await a response from Estonia on their estcoin plan. A plan that to us seems very promising, and might even allow Estonia to create a small empire of its own.
But the real game of empires belongs to China and America, for now. They have suddenly taken a seemingly opposing direction as far as this space is concerned.
China, as is well known, banned ICOs. But there are credible reports they may in effect ban crypto completely by shutting down Chinese crypto exchanges. Something which would probably deny the country any advances in blockchain technology.
While in America, after a decade of Democrats rule, the Republican controlled Congress will decide whether to repeal IRS’s double taxation of digital currencies for purchases up to $600.
The bipartisan bill is a step in the right direction and we support it, although we don’t think it goes far enough. Congress should instead declare all digital currencies as legal tender in line with Hayek’s suggestion.
Because after a decade of Keynesian economics of tax and spend, it may be time to try some Hayek and cut taxes as well as the red tape.
That will be particularly important where ICOs are concerned. America has the talent, the demand and the funds, so innovation will be able to make the most impact in USA if regulators do not stand in its way.
In that regard, UK has usually led and has been rewarded for it with London’s Fintech booming, expecting to raise $3.3 billion in investment funding. But so far they have been silent on ICOs, save for to tell us they do not regulate the underlying technology, which might translate to not regulating DAO like entities as in effect they are smart contracts.
However, we’ll have to wait for actual guidelines following their public consultation on ICOs to see whether they will continue to show great foresight on the regulatory front as far as this space is concerned.
Interestingly, Russia has considerably warmed up to this space following Putin’s brief meeting with Vitalik Buterin, ethereum’s inventor, with Putin himself apparently backing blockchain technology.
That was followed by quite a bit of positive news from Russia concerning this space, culminating in a partnership agreement between Ethereum Russia – an entity set-up by Buterin – and Russia’s state bank for development.
That leaves China the odd one out and isolated as far as this space is concerned, but there are two countries that might be of more relevance at a global regulatory front.
That is France and Germany. We haven’t heard much from either, and almost nothing from France. Macron, the French President, has been pictured with a Ledger Nano bitcoin wallet, but the French industry and finance seems to be somewhat behind as far as this space is concerned.
German industry, on the other hand, is probably ahead of most in adopting blockchain technology and digital currencies like ethereum. Their parliamentarians have made some comments through the European Parliament forum, but we haven’t heard much since then.
The global picture, therefore, appears to be generally friendly, but also mixed following Draghi’s comments. With Germany potentially rising to play a key role.
It remains to be seen whether this time they will stand for freedom and support the new generation in their invention which aims to improve the world in all ways.
Or whether they will once more choose the authoritarian way and bully their smaller neighbors into following their diktats.