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Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

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Re: Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

#11

Post by eniotna »

timeagain wrote: post #8
derefr wrote: post #6

Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy…

> If the people of a country include a large criminal element that would forcefully put themselves in the position of rentier middleman, extracting all margin from interactions in the economy for themselves and so starving the country of growth capital Isn’t this the business plan of every failed/fraudulent crypto exchange?

Keyword here is "forcefully", when you use an exchange, you willingly do so.

Re: Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

#13

Post by derefr »

timeagain wrote: post #8
derefr wrote: post #6

Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy…

> If the people of a country include a large criminal element that would forcefully put themselves in the position of rentier middleman, extracting all margin from interactions in the economy for themselves and so starving the country of growth capital Isn’t this the business plan of every failed/fraudulent crypto exchange?

I mean "forcefully" literally. You voluntarily enter into a relationship with Uber, AirBnB, etc; and other companies can enter the same market. You don't voluntarily enter into a relationship with the guy who comes into your shop demanding protection money. Nor with the gang who corners the market for e.g. bananas, by "negotiating" with both the producers and the large commercial buyers at gunpoint.

Re: Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

#14

Post by klntsky »

derefr wrote: post #6

Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy…

> then crypto will help "route around" that well-meaning state, and thereby reinforce the criminal capture of the economy.

How is it possible that these rent-extracting middlemen (whatever it means, mafia?) can _not_ be in control of the state long term? If they capture the profits that power the state in the end, wouldn't it be correct to describe it as a state-in-another-state, state-in-transition or just two-competing-states situation? Crypto seemingly helps with both mafia and the govt for an ordinary user, cause they both have similar powers when it comes to control of crypto txs (almost zero).

Re: Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

#15

Post by rich_sasha »

It feels like BIS is confused here, and I say that as a crypto minimalist.

Yes, ther are many scams in crypto, but the basest of things, sending magic beans between people, is fairly solid. Not without risks, but if you have no alternative, it's pretty good IMHO.

Saying crypto is bad because of scams is like saying dollars are bad because of Nigerian scammers. Can't trust these grannies with their dollars...

Re: Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

#17

Post by acdha »

derefr wrote: post #6

Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy…

> a totalitarian state has imposed top-down laws that interfere with that productive economy — then crypto will help "route around" that totalitarian state, and thereby help the economy.

I don’t think this fits the technology: blockchains are perfect for totalitarian states since they prevent anyone from hiding from the tax collectors and police. The only way it helps is if the government is too weak to enforce its laws, at which point that’s probably the least of your concerns.

Re: Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

#18

Post by troupo »

monero-xmr wrote: post #5

The article is devoid of substance. > All but two of the top 20 countries for crypto adoption are emerging markets, with countries like Venezuela, El Salvador and Nigeria becoming test beds for whether cryptocurrencies could offer a balm to countries ravaged by inflation and depreciating official currencies. There is a reason why people in Venezuela and Argentina flock to currency different from the wildly inflating…

> If anything, smart contracts could be an improvement where presidential candidates are assassinated and narco terrorists bribe judges and police.

You cannot fix social issues with limited code dealing with digital assets only written in esotheric programming languages so impenetrable that their own authors and multiple audits routinely miss trivial exploitable issues.

Re: Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

#19

Post by klntsky »

acdha wrote: post #17
derefr wrote: post #6

Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy…

> a totalitarian state has imposed top-down laws that interfere with that productive economy — then crypto will help "route around" that totalitarian state, and thereby help the economy. I don’t think this fits the technology: blockchains are perfect for totalitarian states since they prevent anyone from hiding from the tax collectors and police. The only way it helps is if the government is too weak to enforce its l…

> prevent anyone from hiding from the tax collectors and police

Only if you use chains with traceable transactions.

Re: Crypto has ‘amplified financial risks’ in emerging markets, central banks warn

#20

Post by J_Shelby_J »

derefr wrote: post #6

Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy…

Those of us fortunate to live within a, mostly, good economic system don’t need cryptocurrency. I don’t have a problem saying that. But I also have the imagination to wonder if it will always be the case. And the empathy to understand that not every human is as fortunate as myself. People making broad statements about a technology seem to do so only from their current perspective. “Crypto is useless” for example, really means: “crypto is useless to me.”
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