remove extra podcast link
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@ -6,6 +6,7 @@ The crypto ideology is an extension of neoliberal project that aims to expand th
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## References
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1. Reijers, Wessel, and Mark Coeckelbergh. 2018. ‘The Blockchain as a Narrative Technology: Investigating the Social Ontology and Normative Configurations of Cryptocurrencies’. Philosophy and Technology 31 (1): 103–30. https://doi.org/10.1007/s13347-016-0239-x.
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1. Cohney, Shaanan, David Hoffman, Jeremy Sklaroff, and David Wishnick. 2019. ‘Coin-Operated Capitalism’. Columbia Law Review 119 (3): 591–676.
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1. Golumbia, David. 2013a. ‘Cyberlibertarianism: The Extremist Foundations of “Digital Freedom.”’ Clemson University Department of English.
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1. ———. 2015. ‘Bitcoin as Politics: Distributed Right-Wing Extremism’. MoneyLab Reader: An Intervention in Digital Economy, Amsterdam: Institute of Network Cultures.
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1. Stinchcombe, Kai. 2018. ‘Blockchain Is Not Only Crappy Technology but a Bad Vision for the Future’. Medium (blog). 9 April 2018. https://medium.com/@kaistinchcombe/decentralized-and-trustless-crypto-paradise-is-actually-a-medieval-hellhole-c1ca122efdec.
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@ -12,6 +12,7 @@ Projects like NFTs and the their increasing enclosure of culture have indicated
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1. Olson, Dan. 2022a. Line Goes Up – The Problem With NFTs. https://www.youtube.com/watch?v=YQ_xWvX1n9g.
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1. McKay, Ian (2014). "A Half-Century of Possessive Individualism: C.B. Macpherson and the Twenty-First-Century Prospects of Liberalism". Journal of the Canadian Historical Association. 25 (1): 307–340. doi:10.7202/1032806ar. ISSN 1712-6274.
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1. Bellinger, Matthew. 2018. ‘The Rhetoric of Bitcoin: Money, Politics, and the Construction of Blockchain Communities’. ResearchWorks Archive. PhD Thesis. https://digital.lib.washington.edu/researchworks/handle/1773/43342.
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1. Cohney, Shaanan, David Hoffman, Jeremy Sklaroff, and David Wishnick. 2019. ‘Coin-Operated Capitalism’. Columbia Law Review 119 (3): 591–676.
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1. Breidbach, Christoph F., and Silviana Tana. 2021. ‘Betting on Bitcoin: How Social Collectives Shape Cryptocurrency Markets’. Journal of Business Research 122: 311–20. https://doi.org/10.1016/j.jbusres.2020.09.017.
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1. Bruun, Maja Hojer, Astrid Oberborbeck Andersen, and Adrienne Mannov. 2020. ‘Infrastructures of Trust and Distrust: The Politics and Ethics of Emerging Cryptographic Technologies’. Anthropology Today 36 (2): 13–17. https://doi.org/10.1111/1467-8322.12562.
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1. Diehl, Stephen. 2021a. ‘Gamestop, Bitcoin and the Commoditization of Populist Rage’. 3 February 2021. https://www.stephendiehl.com/blog/gamestop.html.
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@ -8,6 +8,8 @@ Models such as "Stock To Flow" have shown no predictive power to explain the [pr
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Other products in [bubble](../concepts/bubble.md) such as tulips or beanie babies have exhibited similar market structure to crypto tokens but on smaller scales.
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## References
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1. Shiller, Robert J. 2017. ‘What Is Bitcoin Really Worth? Don’t Even Ask.’ The New York Times, 15 December 2017, sec. Business. https://www.nytimes.com/2017/12/15/business/bitcoin-investing.html.
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1. Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.
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1. Cembalest, Michael. 2022. ‘The Maltese Falcoin: On Cryptocurrencies and Blockchains’. https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf.
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1. Silverman, Gary. 2021. ‘Crypto Has “No Inherent Worth” But Is Good to Trade, Says Man Group Chief’. Financial Times, 26 July 2021. https://www.ft.com/content/9275baf4-0422-43a1-b8c9-9317882ca874.
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@ -15,4 +17,4 @@ Other products in [bubble](../concepts/bubble.md) such as tulips or beanie babie
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1. Diehl, Stephen. 2021. ‘The Intellectual Incoherence of Cryptoassets’. 7 November 2021. https://www.stephendiehl.com/blog/crypto-absurd.html.
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1. Krugman, Paul. 2018a. ‘Bitcoin Is Basically a Ponzi Scheme’. The Seattle Times 30.
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1. ———. 2021a. ‘Technobabble, Libertarian Derp and Bitcoin’. The New York Times 21.
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1. ———. 2021b. ‘The Brutal Truth About Bitcoin’. The New York Times 21.
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1. ———. 2021b. ‘The Brutal Truth About Bitcoin’. The New York Times 21.
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@ -8,6 +8,7 @@ Crypto culture depends heavily on a distortion of language to signify belonging
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* "have fun staying poor" / "hfsp"
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* "If you don't believe it or don't get it, I don't have the time to try to convince you"
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* "we're all going to make" / "wagmi"
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* "we're so early"
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* "hold on for dear life" / "hodl"
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* "the dollar is a ponzi scheme" / everything is a ponzi"
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* "now do the dollar"
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# Automated Clearing House
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@ -4,4 +4,5 @@ In financial regulation, a bank run is the sudden withdrawal of [deposits](depos
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Bank runs where a common occurrence in United States in the market crash of 1929 and during the 1930s. Regulation and federal policy [deposit insurance](deposit-insurance.md) entirely eliminated this phenomenon in subsequent decades.
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## References
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1. Diamond, Douglas W., and Philip H. Dybvig. "Bank runs, deposit insurance, and liquidity." Journal of political economy 91, no. 3 (1983): 401-419.
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1. Roche, Cullen O. 2011. ‘Understanding the Modern Monetary System’. http://ssrn.com/paper=1905625.
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# Clearinghouse
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@ -3,7 +3,7 @@ In crypto technology a *cross bridge* is a combination of [smart-contracts](smar
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Cross bridges are commonly used for [money laundering](money-laundering.md) transactions in which multiple [cryptoassets](cryptoasset.md) are swapped in a method called *chain-hopping* which is used to obscure the provenance of funds associated with [illicit financing](illicit-financing.md).
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See also [defi](defi.md) and [money-laundering](money-laundering.md).
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See also [DeFi](defi.md) and [money-laundering](money-laundering.md).
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## References
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1. Orcutt, Mike. 2020. ‘This Is How North Korea Uses Cutting-Edge Crypto Money Laundering to Steal Millions’. MIT Technology Review. MIT Technology Review. http://www.technologyreview.com/2020/03/05/916688/north-korean-hackers-cryptocurrency-money-laundering/.
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# Crowdfunding
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Crowdfunding refers to any type of business model that uses an online platform to facilitate payments of small amounts of money from a large group of people to fund a common venture or joint cause.
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See also [security](security.md).
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## References
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@ -7,8 +7,7 @@ Many crypto exchanges offer their own [stablecoin](stablecoin.md) whose reserves
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Crypto exchanges are commonly set up in jurisdictions with loose or corrupt financial regulatory regimes. These include, but are not limited to:
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* Antigua
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* Barbuda
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* Antigua & Barbuda
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* Seychelles
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* Malta
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* Jersey
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@ -28,4 +27,4 @@ See also [bucket shop](bucket-shop.md), [market manipulation](market-manipulatio
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1. Canning, Tonya. 2018. ‘"We Don’t Want Hippy Money”: Contradiction and Exchange in a Local Currency System’. PhD Thesis. https://dalspace.library.dal.ca/handle/10222/74190.
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1. Johnson, Kristin N. 2021. ‘Decentralized Finance: Regulating Cryptocurrency Exchanges’. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3831439.
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1. Mizrach, Bruce. 2021. ‘Stablecoins: Survivorship, Transactions Costs and Exchange Microstructure’. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3835219.
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1. Roubini, Nouriel. 2019. ‘The Great Crypto Heist’. Project Syndicate 16. https://www.project-syndicate.org/commentary/cryptocurrency-exchanges-are-financial-scams-by-nouriel-roubini-2019-07.
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1. Roubini, Nouriel. 2019. ‘The Great Crypto Heist’. Project Syndicate 16. https://www.project-syndicate.org/commentary/cryptocurrency-exchanges-are-financial-scams-by-nouriel-roubini-2019-07.
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# Crypto Asset
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A digital [asset](assets.md) that is traded on a [blockchain](blockchain.md) network. Sometimes also referred to by "cryptocurrency" although this namesake has semantic issues due to confusion around differing [currency](currency.md) definitions.
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A digital [asset](assets.md) that is traded on a [blockchain](blockchain.md) network. Sometimes also referred to as "cryptocurrency" although this name has semantic issues due to confusion around differing [currency](currency.md) definitions.
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Examples of crypto assets include, but are not limited to:
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* [Bitcoin](bitcoin.md)
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@ -15,4 +15,4 @@ Examples of crypto assets include, but are not limited to:
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1. Varoufakis, Yanis. 2021. ‘What Is Money, Really? And Why Bitcoin Is Not the Answer (Even If Blockchain Is Brilliant & Potentially Helpful in Democratising Money)’. Yanis Varoufakis (blog). 2 August 2021. https://www.yanisvaroufakis.eu/2021/08/02/what-is-money/.
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1. Larue, Louis. 2020. ‘“A Conceptual Framework for Classifying Currencies”.’ International Journal of Community Currency Research 24 (1): 45–60.
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1. Pele, Daniel Traian, Niels Wesselhöfft, Wolfgang Karl Härdle, Michalis Kolossiatis, and Yannis G. Yatracos. 2021. ‘Are Cryptos Becoming Alternative Assets?’ European Journal of Finance, 1–42. https://doi.org/10.1080/1351847X.2021.1960403.
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1. Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.
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1. Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.
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# Fictitious commodities
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A *fictitious commodity* or *pseudo-commodity* is a product is traded like a commodity but has no [use value](use-value.md) and its demand curve is not generated by any external economic processes. It is a [non-economic](non-economic.md) product which is generated either through [enclosure](enclosure.md), [artificial demand](artificial-demand.md) or as part of a [greater fool](greater-fool-theory.md) scheme or bubble.
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A *fictitious commodity* or *pseudo-commodity* is a product that is traded like a commodity but has no [use value](use-value.md) and whose demand curve is not generated by any external economic processes. It is a [non-economic](non-economic.md) product which is generated either through [enclosure](enclosure.md), [artificial demand](artificial-demand.md) or as part of a [greater fool](greater-fool-theory.md) scheme or bubble.
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Structurally similar to a [financial asset](financial-asset.md), but unlike a financial asset it renders no contractual claims on [income cashflows](income-cashflows.md) and thus has zero [fundamental value](fundamental-value.md).
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Structurally it is similar to a [financial asset](financial-asset.md), but unlike a financial asset it renders no contractual claims on [income cashflows](income-cashflows.md) and thus has zero [fundamental value](fundamental-value.md).
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Examples of fictitious commodities include:
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# Flash Crash
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# Fundamental Value
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In quantative finance, the fundamental value is the [present value](present-value.md) of all expected future net [income-cashflows](income-cashflows.md) to the asset calculated via discounted cash flow valuation.
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In quantitative finance, the fundamental value is the [present value](present-value.md) of all expected future net [income-cashflows](income-cashflows.md) to the asset calculated via discounted cash flow valuation.
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See also [present value](present-value.md), [terminal value](terminal-value.md) and [financial asset](financial-asset.md).
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# Gold Standard
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A monetary standard for a [currency](currency.md) based on precious metal [commodities](commodity.md), espoused as [sound money](sound-money.md) in [Austrian economics](austrian-economics.md).
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Very few mainstream economists believe the gold standard to be a good way to run a currency. Historically there have been many problems over the now-standard fiat money system. Common criticisms of the gold standard include:
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Very few mainstream economists believe the gold standard to be a good way to run a currency. Historically there have been many problems over the now-standard [fiat money](fiat-money.md) system. Common criticisms of the gold standard include:
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* Unequal distribution of gold across Earth gives certain countries and groups unequal access to value detached from economic activity and based purely on geography.
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* Limits the amount of economic growth because supply is limited.
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* Gold mining and production is not predictable on long time scales.
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* Shocks in one economic region transfer to other regions. (Great Depression & World War II)
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See also [sound money](sound-money.md).
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See also [sound money](sound-money.md) and [Austrian economics](austrian-economics.md).
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## Essays
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## References
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1. Green, Russell A. "Gold Standard or Fool’s Gold? Should the US Consider Returning to the Gold Standard?." Issue Brief 02.23. 16 (2016).
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1. Allon, Fiona. 2018. ‘Money after Blockchain: Gold, Decentralised Politics and the New Libertarianism’. Australian Feminist Studies 33 (96): 223–43. https://doi.org/10.1080/08164649.2018.1517245.
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1. Roche, Cullen O. 2011. ‘Understanding the Modern Monetary System’. http://ssrn.com/paper=1905625.
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Gold is a [non-productive](productive-asset.md) investment.
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Trading gold is a [zero-sum game](zero-sum-game.md).
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## References
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1. Eich, Stefan. 2018. ‘The Currency of Politics’. The Political Theory of Money from Aristotle to Keynes.
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1. Larue, Louis. 2020. ‘“A Conceptual Framework for Classifying Currencies”.’ International Journal of Community Currency Research 24 (1): 45–60.
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# Hard Fork
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An event when a [cryptoasset](cryptoasset.md) on a [blockchain](blockchain.md) has a divergence in its transaction history and is duplicated into two separate histories. Effectively results in a split of the asset into two versions of itself which are incompatible until either one fork is abandoned or becomes a separate asset all together.
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Most major crypto assets including [bitcoin](bitcoin.md) and [ethereum](ethereum.md) have had hard forks.
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## References
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1. Schneier, Bruce. 2019. ‘There’s No Good Reason to Trust Blockchain Technology’. Wired Magazine. https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/.
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1. Rosenthal, David. n.d. ‘Stanford Lecture on Cryptocurrency’. Accessed 2 March 2022. https://blog.dshr.org/2022/02/ee380-talk.html.
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1. Plant, Luke. 2022. ‘The Technological Case against Bitcoin and Blockchain’. Luke Plant’s Home Page. 5 March 2022. https://lukeplant.me.uk/blog/posts/the-technological-case-against-bitcoin-and-blockchain/.
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1. Weaver, Nicholas. 2018. Blockchains and Cryptocurrencies: Burn It With Fire. Berkeley School of Information. https://www.youtube.com/watch?v=xCHab0dNnj4.
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# Human-in-the-loop
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@ -6,4 +6,5 @@ The [dollar](dollar.md) is an example of an [asset](assets.md) which is inflatio
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See also [deflationary asset](deflationary.md).
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## References
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1. Frisch, Helmut. 1983. Theories of Inflation. Cambridge University Press.
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1. Frisch, Helmut. 1983. Theories of Inflation. Cambridge University Press.
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1. Ashton, Michael. What's Wrong with Money?: The Biggest Bubble of All. John Wiley & Sons, 2016.
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# Liquidity Risk
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@ -7,5 +7,6 @@ The term *madness of crowds* is a concept concerning the extreme and abberant co
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## References
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1. Mackay, Charles. 2012. Extraordinary Popular Delusions and the Madness of Crowds. Simon and Schuster.
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1. Shiller, Robert J. 2015. ‘Irrational Exuberance’. In Irrational Exuberance. Princeton university press.
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1. Bernstein, William J. 2021. The Delusions of Crowds: Why People Go Mad in Groups. Grove Press.
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1. Blanchard, Olivier J, and Mark W Watson. 1982. ‘Bubbles, Rational Expectations and Financial Markets’. NBER Working Paper, no. w0945.
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The expansion of crypto tokens is [is widely](../claims/is-bubble.md) perceived to be a market mania.
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## References
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1. Chancellor, Edward. 1999. ‘Devil Take the Hindmost: A History of Financial Speculation’.
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1. Gibson, Thomas. 1907. The Cycles of Speculation. Moody Corporation.
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1. Mackay, Charles. 2012. Extraordinary Popular Delusions and the Madness of Crowds. Simon and Schuster.
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1. Shaffer, Daniel S. 2010. Profiting in Economic Storms: A Historic Guide to Surviving Depression, Deflation, Hyperinflation, and Market Bubbles. John Wiley & Sons.
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1. Blanchard, Olivier J, and Mark W Watson. 1982. ‘Bubbles, Rational Expectations and Financial Markets’. NBER Working Paper, no. w0945.
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1. Chancellor, Edward. 1999. ‘Devil Take the Hindmost: A History of Financial Speculation’.
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1. Blanchard, Olivier J, and Mark W Watson. 1982. ‘Bubbles, Rational Expectations and Financial Markets’. NBER Working Paper, no. w0945.
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1. Bernstein, William J. 2021. The Delusions of Crowds: Why People Go Mad in Groups. Grove Press.
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1. Mackay, Charles. 2012. Extraordinary Popular Delusions and the Madness of Crowds. Simon and Schuster.
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1. Smales, L. A. 2022. ‘Investor Attention in Cryptocurrency Markets’. International Review of Financial Analysis 79: 101972. https://doi.org/10.1016/j.irfa.2021.101972.
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1. Kolchinski, Alex. 2022. ‘Crypto Is an Unproductive Bubble’. Alex Kolchinski (blog). 18 March 2022. https://alexkolchinski.com/2022/03/18/crypto-is-an-unproductive-bubble/.
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# Mobile Payments
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* AliPay
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* ApplePay
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* M-Pesa
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* Venmo
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* WeChat Play
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* Zelle
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# Price Risk
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Price risk is the risk of a decline in the value of an [asset](asset), due to external factors or market conditions, during a period in which a financial contract is active. The risk of the asset declining must be factored into the contract's payment terms to hedge the risk of the asset.
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*Price risk* or *market risk* is the risk of a decline in the value of an [asset](asset), due to external factors or market conditions, during a period in which a financial contract is active. The risk of the asset declining must be factored into the contract's payment terms to hedge the risk of the asset.
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[Crypto assets](cryptoasset.md) are subject to extreme volatility and thus have extreme price risk, which makes them unsuitable as a [medium of exchange](money.md) or for denominating contracts in.
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4. [Systemic risk](systemic-risk.md)
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## References
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1. Knight, Frank Hyneman. Risk, uncertainty and profit. Vol. 31. Houghton Mifflin, 1921.
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1. Petro, Louis W., James P. Martin, Adam A. Wadecki, and Harry Cendrowski. The handbook of fraud deterrence. John Wiley & Sons, 2007.
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@ -5,8 +5,11 @@ See also [regulatory-arbitrage](regulatory-arbitrage.md).
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## References
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1. Allen, Hilary J. 2022. ‘DeFi: Shadow Banking 2.0?’ William & Mary Law Review, Forthcoming.
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1. Steele, Graham. 2021. ‘The Miner of Last Resort: Digital Currency, Shadow Money and the Role of the Central Bank’. Technology and Government, Emerald Studies in Media and Communications, Forthcoming.
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1. Gorton, Gary, Andrew Metrick, Andrei Shleifer, and Daniel K. Tarullo. "Regulating the shadow banking system [with comments and discussion]." Brookings papers on economic activity (2010): 261-312.
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1. Awrey, Dan, and Kristin Van Zwieten. "The shadow payment system." J. Corp. L. 43 (2017): 775.
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1. Kress, Jeremy C., Patricia A. McCoy, and Daniel Schwarcz. "Regulating entities and activities: complementary approaches to nonbank systemic risk." S. Cal. L. Rev. 92 (2018): 1455.
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1. Braun, Benjamin, and Daniela Gabor. 2019. ‘Central Banking, Shadow Banking, and Infrastructural Power’. https://doi.org/10.31235/osf.io/nf9ms.
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1. Steele, Graham. 2021. ‘The Miner of Last Resort: Digital Currency, Shadow Money and the Role of the Central Bank’. Technology and Government, Emerald Studies in Media and Communications, Forthcoming.
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1. Gorton, Gary B., and Jeffery Zhang. 2021. ‘Taming Wildcat Stablecoins’. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3888752.
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1. Malloy, Matthew, and David Lowe. 2021. ‘Global Stablecoins: Monetary Policy Implementation Considerations from the U.S. Perspective’. Finance and Economics Discussion Series 2021 (020): 1–14. https://doi.org/10.17016/feds.2021.020.
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1. Pupolizio, Ivan. 2021. ‘From Libra to Diem. The Pursuit of a Global Private Currency’. Global Jurist. https://doi.org/10.1515/gj-2021-0055.
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# Wait-and-see Regulation
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@ -60,6 +60,9 @@ Understand crypto and "web3" in terms of recent news events and interviews and e
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* [Recent News Stories](/notes/recent-events.md)
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* [Commentary on 'Line Goes Up'](../notes/olson-2022-line-go-up.md)
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* [Commentary on 'Web3 is a Libertarian Dystopia'](../notes/web3-dystopia)
|
||||
* [Commentary on Secretary Yellen's Speech](../notes/yellen-treasury-remarks.md)
|
||||
* [Commentary on Chairman Gensler's Speech](../notes/sec-remarks.md)
|
||||
* Commentary on 'Driverless Finance'
|
||||
|
||||
***
|
||||
|
||||
|
|
@ -153,6 +156,7 @@ Understand the deeper theoretical concepts behind the technical and economic cla
|
|||
* [Automated Market Maker (AMM)](../concepts/amm.md)
|
||||
* [Decentralized Exchange (DEX)](../concepts/dex.md)
|
||||
* [Yield Farming](../concepts/yield-farming.md)
|
||||
* [Hard fork](../concepts/hard-fork.md)
|
||||
|
||||
#### Regulation
|
||||
|
||||
|
|
|
|||
|
|
@ -4,4 +4,6 @@
|
|||
2. [Episode #2: Market Fundamentalism](../notes/market-fundamentalism.md)
|
||||
3. [Episode #3: Securities Regulation](/notes/are-crypto-tokens-securities.md)
|
||||
4. [Episode #4: Post-state Technocracy](../notes/post-state-technocracy.md)
|
||||
5. Episode #5: Fintech Incrementalism
|
||||
5. [Episode #5: Fintech Incrementalism](../notes/fintech-incrementalism-and-responsible-innovation.md)
|
||||
6. [Episode #6: Public Goods and Climate Change](../notes/collective-action-problems-and-climate-change.md)
|
||||
7. Episode #7: Authoritarianism
|
||||
|
|
|
|||
|
|
@ -11,7 +11,6 @@ aliases: notes/neo-metallism.md
|
|||
|
||||
* Wiki topic: [Securities Framework](../concepts/security.md)
|
||||
|
||||
|
||||
***
|
||||
|
||||
# Episode Notes
|
||||
|
|
|
|||
|
|
@ -1,14 +1,20 @@
|
|||
# Collective Action Problems & Climate Change
|
||||
---
|
||||
title: Collective Action Problems & Climate Change
|
||||
created: 2022-04-13
|
||||
date: 2022-04-13
|
||||
description: "In episode #6 in our series of deep dives into crypto and web3, Rufus Pollock and Stephen Diehl explore the interaction of climate change and public goods problems. They focus on KlimaDAO as an example of an attempted solution to solve a public goods problem within the climate space using a Decentralized Autonomous Organization."
|
||||
youtube: https://www.youtube.com/watch?v=SLXtnCL6IxE
|
||||
podcast: https://anchor.fm/life-itself/episodes/Collective-Action-Problems--Climate-Change-e1h4o6e/a-a7gpq18
|
||||
featured: false
|
||||
aliases: notes/collective-action-problems-and-climate-change.md
|
||||
---
|
||||
|
||||
In episode #6 in our series of deep dives into crypto and web3, Rufus Pollock and Stephen Diehl explore the interaction of climate change and public goods problems. They focus on KlimaDAO as an example of an attempted solution to solve a public goods problem within the climate space using a Decentralized Autonomous Organization.
|
||||
{/* https://www.youtube.com/watch?v=SLXtnCL6IxE */}
|
||||
|
||||
<iframe width="560" height="315" src="https://www.youtube.com/embed/SLXtnCL6IxE" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
|
||||
|
||||
* Youtube: [https://www.youtube.com/watch?v=SLXtnCL6IxE](https://www.youtube.com/watch?v=SLXtnCL6IxE)
|
||||
* Podcast: https://anchor.fm/life-itself/episodes/Collective-Action-Problems--Climate-Change-e1h4o6e/a-a7gpq18
|
||||
{/* Podcast: https://anchor.fm/life-itself/episodes/Collective-Action-Problems--Climate-Change-e1h4o6e/a-a7gpq18 */}
|
||||
* Wiki topic: [public-goods-problem](../concepts/public-goods-problem.md)
|
||||
|
||||
***
|
||||
***
|
||||
|
||||
# Episode Notes
|
||||
|
||||
|
|
|
|||
|
|
@ -0,0 +1,294 @@
|
|||
# Driverless Finance Notes
|
||||
Allen, Hilary. 2022. Driverless Finance. Oxford University Press.
|
||||
|
||||
Reading notes on the new textbook about regulation of fintech.
|
||||
|
||||
## Chapter 1 - The Cause for Precaution
|
||||
### Dealing with Uncertainty
|
||||
|
||||
Precaution about fintech is warranted and requires a value judgement about costs and benefits ahead of time.
|
||||
|
||||
> Instead—unavoidably—regulatory approaches to new financial technologies will have to be informed, at least to some degree, by assumptions and value judgments about the likely costs and benefits of these new technologies. This chapter explains why, in the face of the uncertainty associated with new financial technologies, we should take a precautionary approach.
|
||||
|
||||
Fintech policy is inherently about predicting events about unknown futures and managing tail risks.
|
||||
|
||||
> Knightian uncertainty” therefore describes a world of “unknown unknowns” where we may not even know the types of risks we face, let alone their probability of occurring. Knightian uncertainty is an apt description of our financial future.
|
||||
> [...]
|
||||
> We could throw our hands up in the face of this Knightian uncertainty, leaving new financial technologies unregulated and simply letting the free markets shape their development instead
|
||||
|
||||
Financial stability as a [public-goods-problem](../concepts/public-goods-problem.md).
|
||||
|
||||
> financial stability is a classic “public good,” in the sense that everyone benefits from it, but the public can’t be forced to pay for it.
|
||||
|
||||
Government's role in process:
|
||||
|
||||
> It is precisely the province of good government to make guesses as to what laws are likely to be worth their costs ... there is no reason to assume that in the absence of conclusive information no government action is better than some action ... in uncertainty increase the chances of correcting an error.
|
||||
|
||||
### The Cost of Doing Nothing
|
||||
|
||||
Definition of [capital formation](../concepts/capital-formation.md).
|
||||
|
||||
> The financial system also exists to move money from those who have it and wish to invest it, to those who need it to grow. This is often referred to as the “capital intermediation” function of our financial system,
|
||||
|
||||
> Many in the financial industry genuinely believed that this securitization process had made mortgage lending safer by moving mortgage risk out of the banking system; others simply didn’t care because it was profitable in the short-term.
|
||||
|
||||
The human costs of [market manias](../concepts/market-mania.md) and [bubbles](../concepts/bubble.md).
|
||||
|
||||
> Even among people who were able to keep their jobs and some sense of financial security during the recession, many experienced a pervading sense of uncertainty and precariousness that may have caused them to delay life events like marriage, home purchases and retirement.
|
||||
|
||||
The rise of financial populism as a result of the 2008 financial crisis and government bailouts.
|
||||
|
||||
> Not only are emergency responses to financial crises unlikely to be completely successful, they are also likely to be a very bitter pill for most of society to swallow. Many people heard about funds being pumped into the very financial institutions that had caused the 2008 crisis, saw little relief being provided to everyday people suffering as a result of the crisis, and concluded that there was “a pattern of winners and losers that could not be defended on any principle of desert.” This sense of economic injustice was exacerbated in countries that chose to, or were forced to, implement austerity measures
|
||||
|
||||
### What exactly do we mean by precuation?
|
||||
|
||||
How [regulatory capture](../concepts/regulatory-capture.md) occurs organically out of expertise asymmetries.
|
||||
|
||||
> When the technology is complex, this can be a very challenging thing to ask of financial regulators, who may lack the necessary technical expertise to look critically at the innovation. Regulators may end up deferring to and internalizing the rosy perspective of the regulated industry—at the expense of the public interest. This phenomenon is known as cognitive capture.
|
||||
|
||||
The public knowledge of financial crises fades with time.
|
||||
|
||||
> While all members of the public have a continuing vested interest in promoting financial stability, it becomes increasingly difficult to marshal their attention as memories of previous crises fade.
|
||||
|
||||
### Precaution in other contexts
|
||||
|
||||
Financial catastrophes are abstract and hard for the public to understand, as compared to threats to health or bodily harm.
|
||||
|
||||
> If viewed collectively, the widespread economic, psychological, and political costs of a financial crisis should be more than enough justification for precautionary intervention. And yet, many new financial technologies are being developed without any regulatory oversight
|
||||
|
||||
The FDA has more of a mandate and is more proactive about regulation because the public intuits the nature of health problems more than financial health problems.
|
||||
|
||||
### The costs of precuationary regulation
|
||||
|
||||
> However, it is very difficult to quantify the benefits of financial stability regulation—what numbers should we use? Methodologies for estimating the cost of the 2008 crisis vary enormously, and the cost of that crisis probably won’t be predictive of the cost of a future crisis.
|
||||
|
||||
> Financial regulation may therefore, at least in some respects, help facilitate innovation in financial products and services—so we should think long and hard about the type of innovation that regulation should seek to promote.
|
||||
|
||||
### Innovation isn't always good
|
||||
|
||||
Innovation can be bad. Financial engineering can cause more harm than good in many cases.
|
||||
|
||||
> At the heart of debates about regulation and innovation, there is often an implicit assumption that innovation is a good thing. But it is important to acknowledge that this is not always the case—at the very least, we should accept that innovation is not always unqualifiedly good.
|
||||
|
||||
It is possible to have [non-economic](../concepts/non-economic.md) innovation.
|
||||
|
||||
> However, not all financial innovation is disruptive, and not all financial innovation propels economic growth.
|
||||
|
||||
The [predatory inclusion](../concepts/predatory-inclusion.md) of payday loans are financial innovation that is worse than [banks](../concepts/bank.md).
|
||||
|
||||
> When banks are not available to serve consumer needs, fringe providers fill the void. The financial services provided by these fringe providers (including check cashing services and payday loans), “cost more, take longer, risk more, and do less to build their financial futures” than equivalent services provided by mainstream financial institutions
|
||||
|
||||
Some fintechs are bad actors and rely on [techno-obscurantism](../concepts/techno-obscurantism.md) to sell [financial assets](../concepts/financial-asset.md) to unwitting buyers.
|
||||
|
||||
> If fintech business models try to exploit groups of consumers with little financial sophistication or experience, then fintech’s promise to expand access to financial services could be seen as a little sinister.
|
||||
|
||||
> If innovation is driven entirely by a financial institution’s desire to generate fees by repeatedly introducing updated versions of existing products and services, and if the new versions don’t achieve anything significantly different to the older versions, they will increase the complexity of the financial system without providing any real improvement to the user
|
||||
|
||||
> Or, if the innovator is a start-up firm, their innovations may be designed more to attract the interest of venture capital investors than to satisfy genuine needs for their users
|
||||
|
||||
Some innovation is driven by [artificial demand](../concepts/artificial-demand.md) or incoherent [narratives](../claims/is-narrative-economics.md) about "innovation" and novelty instead of utility.
|
||||
|
||||
> It might seem counterintuitive that there could ever be a market for a product that does not meet genuine market needs, but in fact, there are many ways in which this can happen. Demand can be generated by fads and trends, rather than a reasoned evaluation of the product or service,with users primarily enticed by the story that has been spun by the innovator.
|
||||
|
||||
[Regulatory arbitrage](../concepts/regulatory-arbitrage.md) is not innovation.
|
||||
|
||||
> We also have little to fear from limiting innovation that primarily exists to evade or “arbitrage” regulation (in the sense that a product or service achieves the same economic function as a regulated product or service, but does so in a way that manages to avoid the regulation).
|
||||
|
||||
It is not productive for regulators to incrementally regulate things that then become unregulated by changes to the underlying technology.
|
||||
|
||||
> Innovations designed to arbitrage existing regulations often spur the creation of more regulations, and then new innovations are created to innovate around the new regulations in an unending cycle of increasing complexity. A precautionary approach can help stop this cat and mouse game by shifting the burden to the innovator to demonstrate that the innovation meets a need beyond exploiting regulatory loopholes.
|
||||
|
||||
### Imagine if credit default swaps had been cryptoassets
|
||||
|
||||
Using [smart contracts](../concepts/smart-contracts.md) to automate the handling of derivatives products.
|
||||
|
||||
> In the future, it may be technologically possible to create a contract so that some of its terms are programmed into a smart contract, while other terms remain in their more traditional paper format to allow for more flexibility.
|
||||
|
||||
We still need [human-in-the-loop](../concepts/human-in-loop.md).
|
||||
|
||||
> However, interactions and feedback loops between the automated and non-automated provisions of the contract will create lots of potential for unanticipated outcomes.
|
||||
|
||||
### Precautionary regulation is process-oriented
|
||||
|
||||
> The financial system becomes more fragile as it becomes faster, more complex, more interconnected, and more correlated, and so regulators need to be particularly alert to any new innovation that contributes to these forces. If regulators don’t focus on the development process, then it is easy to be fooled into thinking that a new product (like a smart contract CDS) that achieves roughly the same result as an existing product (like a paper CDS), should be regulated in the same way as the existing product.
|
||||
|
||||
Regulation needs to follow from understanding on both sides.
|
||||
|
||||
> Merely by virtue of knowing that they will struggle to explain an exceedingly complex innovation to a regulator, innovators may be encouraged to eliminate superfluously complex features before seeking regulatory approval.
|
||||
|
||||
Products that can't be explained simply to regulators are a red flag.
|
||||
|
||||
> A regulator has a job to try to understand innovation and regulate it, but it doesn’t mean that the innovator has the right to introduce the innovation in the market ... if I can’t understand it I won’t permit it until you make me understand, or until you redesign it in a way that we can understand.
|
||||
|
||||
Complete bans are sometimes necessary to deal with Knightian uncertainty and extreme risk.
|
||||
|
||||
> Banning an innovation before it even reaches the market will certainly deprive society of its potential benefits. This loss of benefits may ultimately be a harm that even outweighs the risks associated with the product. However, in an environment of Knightian uncertainty, difficult trade-offs will have to be made on the basis of imperfect information
|
||||
|
||||
The problem of [moral hazard](../concepts/moral-hazard.md).
|
||||
|
||||
> Maintaining the current practice of waiting until a problem has occurred before taking regulatory action is not a neutral approach. Instead, it stacks the deck in favor of the innovators who get to profit by generating risks that, if they come to fruition, will be borne primarily by the rest of society.
|
||||
|
||||
### Time is of the Essence
|
||||
|
||||
The time to act on [crypto](../concepts/cryptoasset.md) regulation is now.
|
||||
|
||||
> The financial applications of smart contract and distributed ledger technologies (as well as machine learning and cloud computing technologies) are still in their early stages. [...] That window of time will close soon, though, and we don’t yet have a precautionary regulatory framework in place for financial innovation
|
||||
|
||||
Incremental regulation is often ineffective since it an be routed around.
|
||||
|
||||
> If that policy bends too far in favor of the industry and too far away from precaution, the financial stability risks of cryptoassets will go largely unregulated—at least until something goes wrong. Once something does go wrong, there may be political support for regulation that targets the specific problem that occurred. However, regulation that is implemented incrementally as problems unfold will spur the industry to innovate around that regulation, inviting more incremental regulation. Layering regulation over cryptoassets over regulation over cryptoassets, unintentionally but inevitably, makes the financial system more fragile by increasing its complexity.
|
||||
|
||||
Precaution is warranted and now is the time to act because of the political environment.
|
||||
|
||||
> We should therefore approach the latest generation of financial innovations, which are likely to exacerbate the already significant levels of complexity, speed, and correlation associated with our financial system, with precaution. In this venture, time is of the essence: the growing public skepticism about the benefits of big tech provides an excellent political opportunity to implement a precautionary approach to new financial technologies, and it should not be wasted.
|
||||
|
||||
## Chapter 2 - Fintech and Risk Management
|
||||
|
||||
### What is risk management?
|
||||
|
||||
[Risk](../concepts/risk.md) comes in many forms.
|
||||
|
||||
> Some of the most important categories of risk that can impact investments include market risk, credit risk, liquidity risk, operational risk, and systemic risk
|
||||
|
||||
## Chapter 3 - Fintech and Capital Intermediation
|
||||
|
||||
### Capital intermediation basics
|
||||
|
||||
Some fintech is designed to increase financial complexity, this presents a challenge to regulators.
|
||||
|
||||
> Increased speed and complexity are a feature of many fintech innovations, not a bug. These innovations were designed to increase the efficiency of capital intermediation, allowing those that need capital to obtain it more quickly, more cheaply, and in more customized ways than ever before—these innovations are also allowing investors to profit in new ways.
|
||||
|
||||
Widespread use of [cryptoassets](../concepts/cryptoasset.md) come with extreme risk.
|
||||
|
||||
> We will pay particular attention to cryptoassets in this chapter, because these have the potential to exponentially increase the amount of risk in the financial system—if cryptoassets were to be widely integrated into our financial institutions and markets, they would pose perhaps the greatest threat of all the innovations considered in this book.
|
||||
|
||||
### Banks and bank runs
|
||||
|
||||
> This banking business model is also useful to society, because it allows deposit funds to be deployed for long-term economic growth, rather than just sitting under a mattress. However, this business model means that banks only ever have a fraction of the cash deposited with them available to return to depositors at any given time.
|
||||
|
||||
> Banking panics occurred repeatedly in the United States in the late nineteenth and early twentieth centuries, but they were largely eliminated by the introduction of government-backed deposit insurance in 1933
|
||||
|
||||
### Shadow banking
|
||||
|
||||
> We can, however, look at past examples of non-bank runs, such as the 2008 run on money market mutual funds, for some clues as to how future panics might play out.
|
||||
|
||||
Money market funds have had to be consistently bailed out because [bank run](../concepts/bank-run.md) like events that occur on non-bank financial institutions.
|
||||
|
||||
> Investors in money market mutual funds purchase shares in those funds with the expectation that the shares will always be valued at one dollar. The true value of each share fluctuates, depending on the assets that thefund has invested in, but a special accounting regime allows each share to be consistently valued at one dollar so long as its true value never deviates too far from the dollar price. If the value of a share in the fund drops too far, though, then the fund will have to revalue its shares below one dollar (which is known as “breaking the buck”)
|
||||
|
||||
[Shadow banking](../concepts/shadow-bank.md) defined.
|
||||
|
||||
> Non-bank financial institutions that perform similar functions to banks are often referred to as “shadow banks,” but trying to determine precisely what does and doesn’t count as shadow banking is very controversial—and can be a distraction.
|
||||
|
||||
### Markets and financial stability
|
||||
|
||||
The purpose of [markets](../concepts/market.md) and [capital formation](../concepts/capital-formation.md).
|
||||
|
||||
> If an asset market becomes so compromised that no trading can be done, then that market can’t perform its socially useful function of connecting those who want to invest with those who need funding
|
||||
|
||||
The Gamestop phenomenon and its relation to crypto.
|
||||
|
||||
> One of the most unnerving things about the GameStop episode was that it suggested that trading is becoming more of a game and that financial assets are becoming increasingly detached from reality—a theme we’ll come back to in the context of cryptoassets. Even in a distorted reality, though, asset bubbles can’t last forever. At some point, bubbles inevitably burst as existing investors lose faith
|
||||
|
||||
Fire sales and [market manias](../concepts/market-mania.md).
|
||||
|
||||
> These fire sales can put downward pressure on the price of assets in other markets, spreading the panic, and potentially requiring still more institutions to sell more assets in different markets.
|
||||
|
||||
Transparent, regulated, and fair markets increase public trust in markets and encourage more [capital formation](../concepts/capital-formation.md). Markets with [asymmetric information](../concepts/asymmetric-information.md) hurt public trust.
|
||||
|
||||
> rules have been adopted that require participants in financial markets— ranging from the institutions that create financial assets in the first place to the intermediaries like brokers and exchanges that have evolved to facilitate the trading process—to release information to other market participants, as well as to regulators. These disclosure rules help capital intermediation because they allow investors to assess and evaluate potential investments.
|
||||
|
||||
### Marketplace lending
|
||||
|
||||
### High frequency trading
|
||||
> Problems with pricing in one market can therefore jump quickly to the derivatives markets. In short, a future flash crash could trigger fire sales that ultimately contaminate other asset markets and disrupt capital intermediation, even if the financial institutions that participate in those asset markets are able to survive.
|
||||
|
||||
### Cryptoassets
|
||||
|
||||
Now most crypto assets present as investment opportunities instead of money.
|
||||
|
||||
> However, Bitcoin has enjoyed spectacular popularity despite these deficiencies—the prices that people are willing to pay for bitcoins as financial assets has skyrocketed. Inspired by Bitcoin’s success as a financial asset, new generations of cryptoassets (usually referred to as “tokens”) have been created that were never intended as money or payment mechanisms.
|
||||
|
||||
Crypto assets present with serious [systemic risk](../concepts/systemic-risk.md) if left unregulated.
|
||||
|
||||
> At scale, cryptoassets could be the most destructive of all the fintech innovations, and if the essence of a precautionary approach to financial stability is “better safe than sorry,” we should focus immediately on the threats they might pose and how to address them.
|
||||
|
||||
Crypto assets have no upper bound on their supply. An infinite number of them can exixt.
|
||||
|
||||
> In the absence of any limitations on supply, cryptoassets provide enormous opportunities for profit that may prove too seductive for the financial industry to ignore.
|
||||
|
||||
Robert Shiller on [valuation modelsl](../claims/is-valuation-model.md) for bitcoin. They are ultimately about human psychology rather than economics.
|
||||
|
||||
> It is not just that very few people really comprehend the technology behind Bitcoin. It is that no one can attach objective probabilities to the various possible outcomes of the current Bitcoin enthusiasm. How can we even start estimating the fundamental value of Bitcoin ...? Any attempt will soon sound silly.
|
||||
|
||||
> Even if some investors continue to view the cryptoassets themselves as too speculative to invest in directly, demand for those assets can still be sustained if investors (including financial institutions) are happy to incur indirect exposure to those assets—and there are already popular mutual funds that invest in, and swap contracts that derive their value from, cryptoassets.
|
||||
|
||||
|
||||
> At the most basic level, an unconstrained supply of cryptoassets and cryptoasset-related assets means that there will be exponentially more assets in the financial system than there are now—what economist James Tobin described as “nth degree speculation” could become a reality.
|
||||
|
||||
|
||||
> Exponential growth of cryptoassets would mean more opportunities for asset bubbles to grow, and more assets to be dumped during fire sales. More cryptoassets also mean more trading transactions which mean more contractual relationships between counterparties that can transmit shocks through the financial system
|
||||
|
||||
|
||||
### Runs, fire sales, and cryptoassets
|
||||
|
||||
> A panic could also arise as a correction to a bubble in cryptoassets: if enthusiasm starts to wane and demand and prices fall, investors who had truly believed that their new type of investment was impervious to traditional market forces could become disillusioned and start selling en masse
|
||||
|
||||
|
||||
> Or cryptoassets could spark an actual bank run. A terrifying worst-case scenario, from a financial stability perspective, would involve the largest financial institutions using cryptoassets as collateral when they borrow from other financial institutions.
|
||||
|
||||
|
||||
### Problems with self-execution
|
||||
|
||||
> However, transactions involving cryptoassets have two attributes that are likely to make runs and fire sales particularly bad: smart contracts’ speed of execution, and their lack of flexibility. Legal systems dealing with paper financial contracts have developed the ability to relax and suspend contractual obligations in the face of a significant unanticipated event, whether through the use of bankruptcy courts, encouraging a contractual party not to enforce their rights, or even by enacting legislation that declares certain contractual terms illegal.
|
||||
|
||||
|
||||
> With paper contracts, though, the parties have opportunities to amend their contracts or agree not to enforce them. Courts can also intervene to fill in the blanks in paper contracts: law professor Katharina Pistor has observed that “the elasticity of law has proved time and again critical for avoiding a complete financial meltdown.”
|
||||
|
||||
|
||||
> It’s important to remember, though, that without consensus mechanisms and gas charges to act as roadblocks, cryptoasset transactions could be processed even faster than they are now. Cryptoassets issued by large banks and techfins could also threaten financial stability
|
||||
|
||||
### Facebook’s Diem
|
||||
|
||||
> Part of the controversy over Diem stems from increasing popular distrust of Facebook: many people wonder if Facebook is pursuing Diem just to generate more data about users and their purchasing habits, which Facebook can then monetize.
|
||||
|
||||
|
||||
> Given Diem’s proposed scale, a run on multi-currency Diem could potentially play havoc with exchange rates globally. If there were a run on any of the different Diem (multi-currency or currency-specific), the rebranded Libra Networks entity would be forced to engage in fire sales that would drive down the prices of short-term government securities, impacting other investors in those securities. The specter of these types of systemic consequences might generate pressure on national authorities to bail out Diem, forcing national taxpayers to ultimately foot Facebook’s bill.
|
||||
|
||||
### Cryptoassets and monetary policy
|
||||
|
||||
> Former Federal Reserve Chairman William McChesney Martin famously said that the central bank’s job is “to take away the punch bowl just as the party gets going”: by adjusting the money supply to raise interest rates, a central bank can try to promote financial stability by tamping down on incipient asset bubbles
|
||||
|
||||
|
||||
> proliferation of cryptoassets to deprive central banks of their ability to make such a decision if and when needed. In other words, even if a central bank decides not to take the punch bowl away, it wouldn’t be wise to let the private sector spike the punch with cryptoassets
|
||||
|
||||
|
||||
> Even the less controversial central bank function of managing inflation could be undermined if central banks lose control of the money supply. When there is a lot of money available in the economy, it is cheaper to borrow, and cheaper money increases purchasing power which drives upinflation. The opposite is also true: when there is less money available, inflation is reduced. If money increasingly takes the form of cryptoassets issued by private entities, then that could displace the use of sovereign currencies and limit the ability of central banks to match the money supply to the economic situation.
|
||||
|
||||
|
||||
> Although bubbles, runs. and fire sales arise from very human tendencies toward overconfidence and panic (and in that sense are nothing new), they can be exacerbated by the increased speed and technological complexity associated with fintech innovations
|
||||
|
||||
|
||||
## Chapter 4 - Fintech and Payments
|
||||
### Fintech and Payments
|
||||
### How payments are processed
|
||||
### Payments failures
|
||||
### Payments regulation
|
||||
### Operational risks in complex systems
|
||||
### Mobile payments
|
||||
### Distributed ledgers and payments
|
||||
### Public payments alternatives
|
||||
### Other financial infrastructure
|
||||
|
||||
## Chapter 5 - Fintech and Financial Stability Regulation Status Quo
|
||||
|
||||
### What is regulation?
|
||||
### Why regulating innovation is hard
|
||||
### Why regulating financial innovation is particularly hard
|
||||
### Innovation support from regulators
|
||||
### Regulatory sandboxes
|
||||
### Critique of innovator-focused regulation
|
||||
### Overview of financial stability regulation
|
||||
### How fintech might undermine financial stability regulation
|
||||
### Industry reliance on regtech
|
||||
### The challenges of suptech
|
||||
|
|
@ -1,14 +1,17 @@
|
|||
# Fintech Incrementalism and Responsible Innovation
|
||||
---
|
||||
title: Fintech Incrementalism and Responsible Innovation
|
||||
created: 2022-04-04
|
||||
date: 2022-04-04
|
||||
description: "In episode #5 of our ongoing deep dive into web3 and crypto, Rufus Pollock and Stephen Diehl explore the claim that blockchain can be a vehicle for increase in financialization through the development of more complex, blockchain based financial products."
|
||||
youtube: https://www.youtube.com/watch?v=7rLQoTtwRSU&t=4s
|
||||
podcast: https://anchor.fm/life-itself/episodes/Fintech-Incrementalism-and-Responsible-Innovation-e1gn02u
|
||||
featured: false
|
||||
aliases: notes/fintech-incrementalism-and-responsible-innovation.md
|
||||
---
|
||||
|
||||
In episode #5 of our ongoing deep dive into web3 and crypto, Rufus Pollock and Stephen Diehl explore the claim that blockchain can be a vehicle for increase in financialization through the development of more complex, blockchain based financial products.
|
||||
|
||||
<iframe width="560" height="315" src="https://www.youtube.com/embed/7rLQoTtwRSU" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
|
||||
|
||||
|
||||
|
||||
* Youtube: https://www.youtube.com/watch?v=7rLQoTtwRSU
|
||||
* Podcast: https://anchor.fm/life-itself/episodes/Fintech-Incrementalism-and-Responsible-Innovation-e1gn02u
|
||||
{/* https://www.youtube.com/watch?v=7rLQoTtwRSU&t=4s */}
|
||||
|
||||
{/* Podcast: https://anchor.fm/life-itself/episodes/Fintech-Incrementalism-and-Responsible-Innovation-e1gn02u */}
|
||||
|
||||
***
|
||||
|
||||
|
|
|
|||
|
|
@ -1,17 +1,19 @@
|
|||
# Market Fundamentalism
|
||||
---
|
||||
title: Market Fundamentalism
|
||||
date: 2022-03-04
|
||||
description: "In episode #2 of the series, Rufus Pollock and Stephen Diehl explore a common incentive for investing in crypto: the belief - held by day traders and quantitative hedge funds alike - that crypto can make those who trade it a lot of money. Particular focus in this episode is placed on the 'market fundamentalist' position."
|
||||
youtube: https://www.youtube.com/watch?v=K5JtPTyc0y0
|
||||
podcast: https://anchor.fm/life-itself/episodes/Crypto--Traders-and-Unfettered-Financial-Markets-with-Stephen-Diehl-e1fgm2d
|
||||
featured: false
|
||||
aliases: notes/market-fundamentalism.md
|
||||
---
|
||||
|
||||
In episode #2 of the series, Rufus Pollock and Stephen Diehl explore a common incentive for investing in crypto: the belief - held by day traders and quantitative hedge funds alike - that crypto can make those who trade it a lot of money. Particular focus in this episode is placed on the 'market fundamentalist' position.
|
||||
{/* https://www.youtube.com/watch?v=K5JtPTyc0y0 */}
|
||||
|
||||
<iframe width="560" height="315" src="https://www.youtube.com/embed/K5JtPTyc0y0" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
|
||||
|
||||
|
||||
|
||||
* Youtube: https://www.youtube.com/watch?v=K5JtPTyc0y0
|
||||
* Podcast: https://anchor.fm/life-itself/episodes/Crypto--Traders-and-Unfettered-Financial-Markets-with-Stephen-Diehl-e1fgm2d
|
||||
{/* Podcast: https://anchor.fm/life-itself/episodes/Crypto--Traders-and-Unfettered-Financial-Markets-with-Stephen-Diehl-e1fgm2d */}
|
||||
* Wiki topic: [Market Fundamentalism](../concepts/market-fundamentalism.md)
|
||||
|
||||
|
||||
***
|
||||
***
|
||||
|
||||
# Episode Notes
|
||||
|
||||
|
|
@ -181,4 +183,4 @@ Rufus and Stephen end their conversation with an analysis of the market fundamen
|
|||
1. Xu, Jiahua, and Benjamin Livshits. 2019. ‘The Anatomy of a Cryptocurrency Pump-and-Dump Scheme’. In 28th USENIX Security Symposium, 1609–25.
|
||||
1. Krugman, Paul. 2018. ‘Transaction Costs and Tethers: Why I’m a Crypto Skeptic’. The New York Times 21.
|
||||
1. Castor, Amy. 2021. ‘The Curious Case of Tether: A Complete Timeline of Events’. https://amycastor.com/2019/01/17/the-curious-case-of-tether-a-complete-timeline-of-events/.
|
||||
1. Griffin, John M, and Amin Shams. 2020. ‘Is Bitcoin Really Untethered?’ The Journal of Finance 75 (4): 1913–64.
|
||||
1. Griffin, John M, and Amin Shams. 2020. ‘Is Bitcoin Really Untethered?’ The Journal of Finance 75 (4): 1913–64.
|
||||
|
|
|
|||
|
|
@ -1,16 +1,19 @@
|
|||
# Post-State Technocracy
|
||||
---
|
||||
title: Post-State Technocracy
|
||||
created: 2022-03-21
|
||||
date: 2022-03-21
|
||||
description: "In episode #4 of our ongoing deep dive into web3 and crypto, Rufus Pollock and Stephen Diehl do a deep dive into the Silicon Valley utopian ideas of crypto assets and explore the notion that crypto assets are a means to create a new form of 'network state' outside of the existing international order."
|
||||
youtube: https://www.youtube.com/watch?v=gZ0iCJkM3PU
|
||||
podcast: https://anchor.fm/life-itself/episodes/On-Web3-and-Post-State-Technocracy-with-Stephen-Diehl--Rufus-Pollock-e1g4cpe
|
||||
featured: false
|
||||
aliases: notes/post-state-technocracy.md
|
||||
---
|
||||
|
||||
In episode #4 of our ongoing deep dive into web3 and crypto, Rufus Pollock and Stephen Diehl do a deep dive into the Silicon Valley utopian ideas of crypto assets and explore the notion that crypto assets are a means to create a new form of "network state" outside of the existing international order.
|
||||
{/* https://www.youtube.com/watch?v=gZ0iCJkM3PU */}
|
||||
|
||||
<iframe width="560" height="315" src="https://www.youtube.com/embed/gZ0iCJkM3PU" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
|
||||
|
||||
|
||||
|
||||
* Youtube: https://www.youtube.com/watch?v=gZ0iCJkM3PU
|
||||
* Podcast: https://anchor.fm/life-itself/episodes/On-Web3-and-Post-State-Technocracy-with-Stephen-Diehl--Rufus-Pollock-e1g4cpe
|
||||
{/* Podcast: https://anchor.fm/life-itself/episodes/On-Web3-and-Post-State-Technocracy-with-Stephen-Diehl--Rufus-Pollock-e1g4cpe */}
|
||||
* Wiki Topic: [Post-state technocracy](../concepts/post-state-technocracy.md)
|
||||
|
||||
|
||||
***
|
||||
|
||||
# Episode Notes
|
||||
|
|
|
|||
|
|
@ -0,0 +1,153 @@
|
|||
# SEC Chairman Gensler Remarks
|
||||
|
||||
Prepared Remarks of Gary Gensler On Crypto Markets Penn Law Capital Markets Association Annual Conference
|
||||
|
||||
https://www.sec.gov/news/speech/gensler-remarks-crypto-markets-040422
|
||||
|
||||
Our reading of the speech and what it entails for US policy on financial regulation of crypto assets. We attempt to translate "policy jargon" into normal English and read between the lines about the Biden administrations developing policy by what they are signalling across multiple officials and agencies.
|
||||
|
||||
***
|
||||
|
||||
> Today, you’ve invited me to talk about the roughly $2 trillion crypto markets.
|
||||
|
||||
> In February, you all might have noticed Super Bowl ads for several crypto platforms. This wasn’t the first time we’d seen some new innovations getting air time on the biggest TV event of the year.
|
||||
|
||||
Public interest in crypto assets has grown extensively. Yet regulation has not caught up.
|
||||
|
||||
> Seeing these ads reminded me that, in the lead-up to the financial crisis, subprime lender AmeriQuest advertised in the Super Bowl. It went defunct in 2007. A few years before that, according to Axios, “Fourteen dotcom companies advertised during the 2000 Super Bowl, most of which are now defunct.” I know many in the audience may just have been young children at the time, but the internet was relatively new back in 2000. The dot-com bubble burst, though, created significant tremors in our markets.
|
||||
|
||||
Crypto is a bubble. And bubbles don't end well for most people who try to time them. They also can cause massive damage to the economy if left unchecked.
|
||||
|
||||
> Ads, thus, don’t equal credibility. In crypto, there is lots of innovation, but plenty of hype. As in other start-up fields, many projects likely could fail. That’s simply part of the entrepreneurial spirit in the U.S.
|
||||
|
||||
Matt Damon is probably the hawking the new pets.com.
|
||||
|
||||
> The SEC’s remit is overseeing the capital markets and our three-part mission: protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets. Within the policy perimeter, regulators also care about guarding against illicit activity, a role that is so important to us and our partners at the Department of the Treasury and the Department of Justice; and about financial stability, which is important to all financial regulators.
|
||||
|
||||
> There’s no reason to treat the crypto market differently just because different technology is used. We should be technology-neutral.
|
||||
|
||||
The SEC oversees activities, not technologies. Its remit oversees regulating investment contracts and it doesn't matter if those investments are done on a blockchain. The laws still apply.
|
||||
|
||||
> So I’d like to mention three areas related to the SEC’s work in this area: platforms, stablecoins, and crypto tokens.
|
||||
|
||||
**Platforms**
|
||||
|
||||
> First are the crypto trading and lending platforms, whether they call themselves centralized or decentralized (DeFi).
|
||||
|
||||
> These platforms have scale, recently trading crypto worth more than $100 billion a day.
|
||||
|
||||
> The crypto market is highly concentrated, with the bulk of trading taking place on only a handful of platforms. Amongst crypto-only exchanges, the top five platforms make up 99 percent of all trading, and just two platforms make up 80 percent of trading. In crypto-to-fiat transactions, 80 percent of trading is on five trading platforms. Similarly, the top five DeFi platforms account for nearly 80 percent of trading on those platforms.
|
||||
|
||||
DeFi is not [decentralized](../concepts/decentralization.md) like the namesake implies. They are highly concentrated opaque markets that may give rise to [cartel](../concepts/cartel.md) and [asymmetric information](../concepts/asymmetric-information.md).
|
||||
|
||||
> Furthermore, these platforms likely are trading securities. A typical trading platform has dozens of tokens on it, at least. In fact, many have well in excess of 100 tokens. As I’ll address later, many of the tokens trading on these platforms may well meet the definition of “securities.” While each token’s legal status depends on its own facts and circumstances, given the Commission’s experience with various tokens that are securities, and with so many tokens trading, the probability is quite remote that any given platform has zero securities.
|
||||
|
||||
DeFi is engaging in [regulatory arbitrage](../concepts/regulatory-arbitrage.md). Almost all of them are likely breaking the law.
|
||||
|
||||
> Thus, I’ve asked staff to work on a number of projects related to the platforms.
|
||||
|
||||
> First is getting the platforms themselves registered and regulated much like exchanges. Congress gave us a broad framework with which to regulate exchanges. These crypto platforms play roles similar to those of traditional regulated exchanges. Thus, investors should be protected in the same way.
|
||||
|
||||
[Crypto exchange](../concepts/crypto-exchange.md) are acting like [broker](../concepts/broker.md) but aren't regulated as such. This does not provide any [consumer protections](../claims/is-consumer-protections.md) and opens the public up to fraud.
|
||||
|
||||
> The U.S. has the greatest capital markets because investors have faith in them. We have rules with respect to safeguarding market integrity, protecting against fraud and manipulation, and facilitating capital formation. If a company builds a crypto market that protects investors and meets the gold standard of our market regulations, then customers will be more likely to trust and have greater confidence in that market.
|
||||
|
||||
The US has deep and fair capital markets that are the best in the world and we want to keep them that way. Companies that want to work with US investors need to come under US law.
|
||||
|
||||
> In my view, regulation both protects investors and promotes investor confidence, in the same way that traffic laws protect drivers and promote driver confidence. It’s at the core of what makes markets work.
|
||||
|
||||
Regulation builds public trust in [markets](../concepts/market.md). Public trust in markets is good.
|
||||
|
||||
> Some have asked if the current exemptions for so-called alternative trading systems (ATSs) could be generally available to crypto platforms. ATSs for the equity and fixed income markets, though, are generally used by institutional investors. This is quite different than crypto asset platforms, which have millions and sometimes tens of millions of retail customers directly buying and selling on the platform without going through a broker. Thus, I’ve asked staff to consider whether and how the protections that are afforded to other investors on exchanges with which retail investors interact should apply to crypto platforms.
|
||||
|
||||
There is debate about whether the typical [broker-dealer](../concepts/broker.md) arrangement is appropriate for trading crypto assets. This is an open regulatory question.
|
||||
|
||||
> Second, crypto platforms currently list both crypto commodity tokens and crypto security tokens, including crypto tokens that are investment contracts and/or notes. Currently, the venues that the SEC oversees solely trade securities. Thus, I’ve asked staff to consider how best to register and regulate platforms where the trading of securities and non-securities is intertwined. In particular, I’ve asked staff to work with the Commodity Futures Trading Commission (CFTC) on how we jointly might address such platforms that might trade both crypto-based security tokens and some commodity tokens, using our respective authorities.
|
||||
|
||||
Crypto exchanges will have to register with the SEC if they want to sell securities to the public. This would bring their products under the remit of traditional securities law.
|
||||
|
||||
> The third area is around crypto custody. Unlike traditional exchanges, currently centralized crypto trading platforms generally take custody of their customers’ assets. Last year, more than $14 billion of value was stolen. I’ve asked staff how to work with platforms to get them registered and regulated and best ensure the protection of customers’ assets, in particular whether it would be appropriate to segregate out custody.
|
||||
|
||||
> Further, unlike traditional securities exchanges, crypto trading platforms also may act as market makers and thus as principals trading on their own platforms for their own accounts on the other side of their customers. I’ve thus asked staff to consider whether it would be appropriate to segregate out market making functions.
|
||||
|
||||
Unlike traditional securities infrastructure that uses [clearinghouses](../concepts/clearinghouse.md) to custody products between sales, crypto exchanges are acting as fully vertically integrated market makers, clearing house and broker and this introduces conflicts of interests that may warp [price formation](../concepts/price-formation.md)i and enable [market manipulation](../concepts/market-manipulation.md).
|
||||
|
||||
> As it relates to crypto lending platforms, we recently charged BlockFi with failing to register the offering of its retail crypto lending product, among other violations. The settlement made clear that crypto markets must comply with time-tested securities laws, such as the Securities Act of 1933 and the Investment Company Act of 1940. It further demonstrates the Commission’s willingness to work with crypto platforms to determine how they can come into compliance with those laws.
|
||||
|
||||
Creating alternative lending platforms that offer extremely high interest rates, with no rationale for those rates, raises some red flags from a consumer protection perspective.
|
||||
|
||||
> BlockFi agreed to attempt to bring its business into compliance with the Investment Company Act, and its parent company announced that it intends to register under the Securities Act of 1933 the offer and sale of a new lending product.
|
||||
|
||||
Turns out BlockFi was breaking the law. We sued BlockFi and we won.
|
||||
|
||||
**Stablecoins**
|
||||
|
||||
> The second area is the $183 billion (and growing) stablecoins market. Outside of use on crypto platforms, stablecoins generally are not used for commerce. Generally, you’re not using them to get a cup of coffee at Good Karma on your way to class from Center City. They are not issued by a central government and are not legal tender.
|
||||
|
||||
Stablecoins are like casino tokens for moving money between different offshore entities outside of the regulatory perimeter.
|
||||
|
||||
> Stablecoins, though, in offering features similar to and potentially competing with bank deposits and money market funds, raise three important sets of policy issues.
|
||||
|
||||
[Stablecoin](../concepts/stablecoin.md) are acting as non-bank financial institutions and offering products that resemble uninsured bank deposits.
|
||||
|
||||
> First, stablecoins raise public policy considerations around financial stability and monetary policy. Such policy considerations underlie regulations that banking regulators have with respect to deposits and that we at the SEC have with respect to money market funds and other types of securities. Many of those issues are discussed in the recent President’s Working Group Report. For instance, what backs these tokens so we can make sure that these holdings can actually be converted to dollars one-to-one? Further, stablecoins are so integral to the crypto ecosystem that a loss of the peg or a failure of the issuer could imperil one or more trading platforms, and may reverberate across the wider crypto ecosystem.
|
||||
|
||||
[Stablecoin](../concepts/stablecoin.md) are vulnerable to [runs](../concepts/bank-run.md) like we saw in the 1930s. Bank runs are very bad. If stablecoins are allowed to scale and still have run risk then this introduces [systemic risk](../concepts/systemic-risk.md) into the whole economy.
|
||||
|
||||
> Second, stablecoins raise issues on how they potentially can be used for illicit activity. Stablecoins primarily are used for crypto-to-crypto transactions, thus potentially facilitating platforms and users avoiding or deferring an on-ramp or off-ramp with the fiat banking system. Thus, the use of stablecoins on platforms may facilitate those seeking to sidestep a host of public policy goals connected to our traditional banking and financial system: anti-money laundering, tax compliance, sanctions, and the like.
|
||||
|
||||
Stablecoins are currently being used for [regulatory arbitrage](../concepts/regulatory-arbitrage.md) and as a means to circumvent US law.
|
||||
|
||||
Stablecoins needs to be brought within the normal [KYC](../concepts/kyc.md) / [AML](../concepts/aml.md) / [CTF](../concepts/ctf.md) framework that almost every other financial service provider that interacts with US person's needs to comply with.
|
||||
|
||||
> Third, stablecoins raise issues for investor protection. Stablecoins were first adopted and continue to be dominantly used on crypto trading and lending platforms. About 80 to 85 percent of trading and lending on these platforms involves stablecoins. When trading on a platform, the tokens actually often are owned by the platforms, and the customers just have a counterparty relationship with the platform. The three largest stablecoins were created by trading or lending platforms themselves, and U.S. retail investors have no direct right of redemption for the two largest stablecoins by market capitalization. There are conflicts of interest and market integrity questions that would benefit from more oversight.
|
||||
|
||||
The most popular stablecoins exclude US persons from withdrawing the USD equivalent of the stablecoin's marked value. This introduces a conflict of interest and makes the market vulnerable to [manipulation](../concepts/market-manipulation.md) by avoiding US regulatory oversight.
|
||||
|
||||
**Tokens**
|
||||
|
||||
> Then, thirdly from a policy perspective are all the other crypto tokens. The fact is, most crypto tokens involve a group of entrepreneurs raising money from the public in anticipation of profits — the hallmark of an investment contract or a security under our jurisdiction. Some, probably only a few, are like digital gold; they may not be securities. Even fewer, if any, are actually operating like money.
|
||||
|
||||
[Crypto asset](../concepts/cryptoasset.md) don't fulfil the definitions of [money](../concepts/money.md). They're investment contracts and need to be regulated as [securities](../concepts/security.md) under US law.
|
||||
|
||||
> When a new technology comes along, our existing laws don’t just go away.
|
||||
|
||||
Regulation needs to be technology neutral. Selling an investment on a blockchain is no different than selling it on paper.
|
||||
|
||||
> In the 1930s, Congress painted with a broad brush the definition of a security. Our laws have been amended many times since then, Congress has painted with an even wider brush, and the Supreme Court has weighed in numerous time. They’ve all said, basically, to protect the public against fraud, to protect the public against scammers, people raising money from the public had to register and make basic disclosures with a cop on the beat: the SEC.
|
||||
|
||||
Securities laws exist for a very good reason. To protect the public and ensure fair and transparent markets. Safe markets are in the public interest to encourage capital intermediation.
|
||||
|
||||
> You might wonder: how might a crypto token be a security?
|
||||
|
||||
> The Supreme Court’s 1946 Howey Test, which was about orange groves, says that an investment contract exists when there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.
|
||||
|
||||
The [Howey test](../concepts/howey-test.md) is the precedent that the United States has used to determine whether an investment meets the criterion of a security. This test is still applicable to crypto investments.
|
||||
|
||||
> My predecessor Jay Clayton said it, and I will reiterate it: Without prejudging any one token, most crypto tokens are investment contracts under the Howey Test. Even before the Howey test, in the first several years of our federal securities laws, some entrepreneurs were notified that they had to register their offerings of chinchillas, whiskey warehouse receipts, oyster beds, and live silver foxes as securities offerings, as “the purported sale of the…property was merely camouflage and not the substance of the transaction.”
|
||||
|
||||
No amount of [techno-obscurantism](../concepts/techno-obscurantism.md) changes the nature of the investment. Crypto tokens can be [securities](../concepts/security.md).
|
||||
|
||||
> Today, many entrepreneurs are raising money from the public by selling crypto tokens, with the expectation that the managers will build an ecosystem where the token is useful and which will draw more users to the project.
|
||||
|
||||
There are currently illegal security sales happening in the crypto ecosystem.
|
||||
|
||||
> Thus, it is important that we work to get crypto tokens that are securities to be registered with the SEC. Issuers of crypto tokens that are securities must register their offers and sales of these assets with the SEC and comply with our disclosure requirements, or meet an exemption. Issuers of all kinds across a variety of markets successfully register and provide disclosures every day. If there are, in fact, forms or disclosure with which crypto assets truly cannot comply, our staff is here to discuss and evaluate those concerns. Any token that is a security must play by the same market integrity rulebook as other securities under our laws.
|
||||
|
||||
United States law still applies to crypto investments. Companies engaging in [regulatory arbitrage](../concepts/regulatory-arbitrage.md) should engage the SEC or risk being shut down.
|
||||
|
||||
**Conclusion**
|
||||
|
||||
> In conclusion, new technologies come along all the time; the question is how we adjust to that new technology. But make no mistake: We already live in a digital age. That’s not what’s new here. We already can buy a cup of coffee with money stored in an app on our smartphones. The days of physical stock certificates ended decades ago. There’s nothing new about people raising money to fund their projects. Crypto may offer new ways for entrepreneurs to raise capital and for investors to trade, but we still need investor and market protection.
|
||||
|
||||
Technology may be new, but the same laws still apply to regulated activities done with new technology.
|
||||
|
||||
> We already have robust ways to protect investors trading on platforms. And we have robust ways to protect investors when entrepreneurs want to raise money from the public.
|
||||
|
||||
Fair, orderly, and efficient markets encourage capital formation which is in the public interests. Regulation is a means to advance these ends.
|
||||
|
||||
> We ought to apply these same protections in the crypto markets. Let’s not risk undermining 90 years of securities laws and create some regulatory arbitrage or loopholes.
|
||||
|
||||
Crypto is engaging in [regulatory arbitrage](../concepts/regulatory-arbitrage.md) of [security](../concepts/security.md) regulation and we're going to continue enforcing these laws.
|
||||
|
||||
***
|
||||
|
|
@ -1,2 +1,191 @@
|
|||
# Senator Yellen Remarks
|
||||
https://home.treasury.gov/news/press-releases/jy0706
|
||||
# Secretary Janet Yellen's Remarks
|
||||
|
||||
Secretary of the Treasury Janet L. Yellen delivered remarks on digital assets policy, innovation, and regulation at American University’s Kogod School of Business Center for Innovation.
|
||||
|
||||
https://home.treasury.gov/news/press-releases/jy0706
|
||||
|
||||
Our reading of the speech and what it entails for US policy on financial regulation of crypto assets. We attempt to translate "policy jargon" into normal English and read between the lines about the Biden administrations developing policy by what they are signalling across multiple officials and agencies.
|
||||
|
||||
***
|
||||
|
||||
> Thank you, President Burwell, for that kind introduction – it is good to be with you again. I am so happy to be at American University where changemakers are changing the world. Groundbreaking leaders in government, academia, and business have walked these halls, and I am pleased to be here to discuss the Biden Administration’s approach to digital assets.
|
||||
|
||||
> A few weeks ago, President Biden signed an Executive Order calling for a coordinated and comprehensive government approach to digital asset policy. Digital assets have grown explosively, reaching a market cap of $3 trillion last November from $14 billion just five years prior.
|
||||
|
||||
Public interest in crypto assets has grown extensively. Yet regulation has not caught up.
|
||||
|
||||
> Digital assets may be relatively new, but they are part of a larger trend – the digitization of finance – that has been in the making for decades. In 1990, there were fewer than 3 million internet users. Now, there are about 4.5 billion, and we take for granted that many aspects of our financial lives can be managed from small internet-connected devices that fit into the palms of our hands.
|
||||
|
||||
> This growth in digital services has opened a world of possibilities and risks that would have seemed fantastical only a few decades ago. Financial services – along with most industries – have evolved in response to exponential advances in computing power and connectivity.
|
||||
|
||||
Digitization and [straight through processing](../concepts/rtgs.md) have led to financial innovation and improvement in the past
|
||||
|
||||
> Most recently, new technology has raised the possibility of reduced reliance on centralized intermediaries like banks and credit card companies. In 2008, a person – or group of people – using the pseudonym Satoshi Nakamoto proposed a decentralized peer-to-peer system for making and processing payments. A key challenge in digital payments is to prevent the same assets from being spent twice. The Bitcoin white paper proposed a novel method for validating transactions using cryptography that addressed the so-called “double spend” problem. This and other innovations related to distributed ledger technology are the foundation for blockchain-based digital assets.
|
||||
|
||||
Yellen presents the theoretical proposition of [blockchain](../concepts/blockchain.md) technology.
|
||||
|
||||
> Over time, the prices of Bitcoin and other cryptocurrencies have been quite volatile, which has inhibited their widespread use in payments. Adoption of cryptocurrencies for payments may be further inhibited by high fees and slower processing times than those associated with other forms of payment. As a practical matter, you’d have a hard time using cryptocurrency to buy a sandwich or a gallon of milk. Other digital assets – like stablecoins or potential Central Bank Digital Currencies – could succeed at being more widely used as a means of exchange, raising potential benefits and risks.
|
||||
|
||||
The administration regards [crypto assets](../concepts/cryptoasset.md) as non-currencies because of their inherent volatility and transaction costs being too prohibitive to allow commerce. They don't fulfil the [properties of money](../claims/is-bitcoin-currency.md).
|
||||
|
||||
They carve out an exception for [stablecoin](../concepts/stablecoin.md) and [central bank digital currencies](../concepts/central-banks.md) which are non-speculative.
|
||||
|
||||
> Proponents believe distributed ledger technology will transform other aspects of financial services like trading, borrowing, and lending. They point to capabilities, like smart contracts, which use computer code to automatically execute an agreement if certain prespecified conditions are met. To the extent that setup is more convenient, and costs are competitive with those required for traditional financial services, digital assets offer the potential to expand access.
|
||||
|
||||
The administration possibly sees [distributed ledger technologies](../concepts/permissioned-blockchain.md) or "permissioned blockchains" as potentially having utility in the existing financial infrastructure. Although the benefits of this technology are unclear at this time. The costs and benefits of these setups may not be a net win.
|
||||
|
||||
> President Biden’s Executive Order tasked experts across the federal government with conducting in-depth analysis to balance the responsible development of digital assets with the risks they present. These tasks will be guided by six policy objectives: first, protect consumers, investors, and businesses; second, safeguard financial stability from systemic risk; third, mitigate national security risks; fourth, promote US leadership and economic competitiveness; fifth, promote equitable access to safe and affordable financial services; and, finally, support responsible technological advances, which take account of important design considerations like those related to privacy, human rights, and climate change. Over approximately the next six months, Treasury will work with colleagues in the White House and other agencies to produce foundational reports and recommendations related to these objectives. In many cases, the work tasked by the Executive Order builds upon ongoing efforts at Treasury.
|
||||
|
||||
The Biden administration has a vested interest and a clear mandate to developing a framework that protects the public and enable greater [financial inclusion](../claims/is-predatory.md) and more efficient and transparent markets. However public interest and the rule of law must guide all these activities.
|
||||
|
||||
> I won’t predict where this work will take us, but that does not mean we are navigating without a compass. Digital assets may be new, but many of the issues they present are not. We have enjoyed the benefits of innovation in the past, and we have also confronted some of the unintended consequences. Today, I want to share five lessons that apply as we navigate the opportunities and challenges posed by these emerging technologies. These lessons relate to the nature of responsible innovation, the structure of appropriate guardrails, the fundamentals of the financial system, our role in the global economy, and the value of collaboration. The first lesson is…
|
||||
|
||||
The federal framework needs to address specific claims and risks associated with this technology based on five core points.
|
||||
|
||||
**I. Our financial system benefits from responsible innovation**
|
||||
|
||||
> New technologies build on older ones and a chain of innovation has transformed financial services over time. Seventy years ago, most Americans used coins, cash, and checks to manage most aspects of their financial lives. Then, in the 1960s, an engineer from IBM attached a magnetic strip to a plastic card and sparked a new category of payment products: credit and debit cards. Those innovations facilitated the growth of other technologies, like ATMs, which made cash available 24/7. More recently, computers, the internet, and mobile phones have driven the explosive growth of electronic payments and online commerce.
|
||||
|
||||
Statement of the obvious truism that financial innovation is sometimes good and leads to societal improvements.
|
||||
|
||||
> Although new technologies have made our financial system more efficient for most Americans, many transactions still take too long to settle. A combination of technological factors and business incentives have produced a common frustrating experience shared by tens of millions of Americans every week: their employer sends their paycheck, but it takes up to two days for the check to hit their bank account. The delay contributes to the use of high-cost check cashers or ‘pay day’ lenders to get their money in time to pay their bills. Some are forced to draw against already low balances and are charged overdraft fees. Estimates suggest Americans spend $15 billion or more each year on such fees and services – essentially a tax of about $100 dollars per working American, due mostly to inefficiency, and disproportionately borne by people with lower incomes.
|
||||
|
||||
American payments infrastructure is vastly behind much of the developed world. This forces consumers to use substandard services and potentially enables [predatory inclusion](../concepts/predatory-inclusion.md).
|
||||
|
||||
> The system is even more expensive and frustrating when you zoom out and look internationally. If you live in a G7 country, you may pay below two percent in transaction and conversion fees to send money across the border. If you live in the developing world, you may pay as high as ten percent. These high costs disproportionately impact the 250 million-plus migrants around the world who send an average of $200 to $300 in remittances to their families each month. Proponents of digital assets envision a more efficient payment system with instantaneous transactions and lower costs no matter where you live.
|
||||
|
||||
Yellen addresses the notion of expanding supranational payment infrastructure like SWIFT and lowering the cost of international money movement.
|
||||
|
||||
> Will the technology live up to that promise? I think it’s too early to tell. Issues like processing time, cost, and technological barriers to access will need to be overcome. The US is actively involved in the work of the G20 to address challenges and frictions with cross-border funds transfers. And, in 2023 the Federal Reserve plans to launch FedNow, an instant payment service that will enable payment in real time, around the clock, every day of the year within the US’ payments system.
|
||||
|
||||
The United States has been working on a real time payments network like Europe's SEPA for a long time and this potentially will roll out soon. This would decrease settlement time for United States persons doing domestic transfers.
|
||||
|
||||
> Some have also suggested that the introduction of a Central Bank Digital Currency, or “CBDC”, could contribute to a more efficient payment system. As a liability of the central bank, a CBDC could become a form of trusted money comparable to physical cash, but potentially offering some of the projected benefits of digital assets.
|
||||
|
||||
Some people suggest that [central bank digital currencies](../concepts/cbdc.md) are a better solution to the Federal Reserves' infrastructure.
|
||||
|
||||
> Under the Executive Order, the Administration will publish a report on the future of money and payments. The report will analyze possible design choices related to a potential CBDC and implications for payment systems, economic growth, financial stability, financial inclusion, and national security.
|
||||
|
||||
The administration is looking into this and researching it, but it is unclear at this time what benefit a [CDBC](../concepts/cbdc.md) would bring.
|
||||
|
||||
> Innovation that improves our lives while appropriately managing risks should be embraced. But we must also be mindful that “financial innovation” of the past has too often not benefited working families, and has sometimes exacerbated inequality, given rise to illicit finance risks, and increased systemic financial risk. This brings me to my next lesson…
|
||||
|
||||
Financial innovation is not always good. We need to weight public interest and the risks of innovation to ensure consumer protections.
|
||||
|
||||
**II. When regulation fails to keep pace with innovation, vulnerable people often suffer the greatest harm**
|
||||
|
||||
> We learned this painful lesson during the Global Financial Crisis. Financial institutions called “shadow banks” and an explosion of new financial products allowed dangerous levels of risks to accumulate. Beginning in 2007, investors grew wary of these risks, and some large institutions began to falter. Soon, people who’d never heard of a “shadow bank” or a subprime mortgage-backed security ended up losing their jobs and life savings. The S&P 500 fell by more than half and household net worth dropped precipitously. The resulting economic distress was most acute and long-lasting for Black Americans and other Americans of color. We need to ensure that the growth of digital assets does not allow similarly dangerous risks to emerge or lead to disproportionate impacts to vulnerable communities.
|
||||
|
||||
Financial engineering led to the last financial crisis. [Shadow banking](../concepts/shadow-bank.md) and tax havens are strangling American democracy. Predatory lending hurt marginalized groups during the subprime mortgage and we don't want to do that again.
|
||||
|
||||
Crypto assets could cause another financial crisis if we don't get ahead of it.
|
||||
|
||||
> Already, the Treasury has worked with the President’s Working Group on Financial Markets, the FDIC, and OCC to study stablecoins, a type of cryptocurrency pegged to a stable source of value, often the US dollar. Stablecoins raise policy concerns, including those related to illicit finance, user protection, and systemic risk. And, they are currently subject to inconsistent and fragmented oversight.
|
||||
|
||||
[Stablecoin](../concepts/stablecoin.md) are currently very risky and unregulated. They might eventually pose [systemic risk](../concepts/systemic-risk.md) like subprime mortage derivatives did in 2008.
|
||||
|
||||
> To peg their stablecoin to a dollar, most issuers say they back their coins with traditional assets that are safe and liquid. This way, whenever you want to trade your stablecoin back into a dollar, the company has the money to make the exchange. But, right now, no one can assure you that will happen. In times of stress, this uncertainty could lead to a run.
|
||||
|
||||
Opaque and unbacked stablecoins are a serious risk to consumers because they could lead to events similar to [bank runs](../concepts/bank-run.md).
|
||||
|
||||
> This is not hypothetical. A stablecoin run occurred in June 2021, when a sharp drop in the price of the assets used to back a stablecoin set off a negative feedback loop of stablecoin redemptions and further price declines.
|
||||
|
||||
Runs on [stablecoins](../concepts/stablecoin.md) have occurred in the past.
|
||||
|
||||
> The PWG report on stablecoins assesses these risks and proposes concrete solutions. And, we are now working with Congress to advance legislation to help ensure stablecoins are resilient to risks that could endanger consumers or the broader financial system. We are also working closely with our international partners to promote consistent regulation and supervision across jurisdictions.
|
||||
|
||||
[Stablecoins](../concepts/stablecoin.md), if they are allowed to exist, need to be brought within the regulatory framework.
|
||||
|
||||
> Of course, stablecoins are just one piece of a much larger ecosystem of digital assets. Our regulatory frameworks should be designed to support responsible innovation while managing risks – especially those that could disrupt the financial system and economy. As banks and other traditional financial firms become more involved in digital asset markets, regulatory frameworks will need to appropriately reflect the risks of these new activities. And, new types of intermediaries, such as digital asset exchanges and other digital native intermediaries, should be subject to appropriate forms of oversight.
|
||||
|
||||
[Stablecoin](../concepts/stablecoin.md) *need* to be regulated as [bank](../concepts/bank.md)-like structures to prevent [runs](../concepts/bank-run.md)
|
||||
|
||||
> We must also be prepared for possible changes in the structure of financial markets. For example, some have suggested that distributed ledger technology could reduce concentration in financial markets. While this could make markets less vulnerable to the failure of any particular firm, it is critical to ensure we maintain visibility into potential build-ups of systemic risk and continue to have effective tools for tamping down excesses where they arise.
|
||||
|
||||
Possibly [blockchain tech](../claims/is-blockchain-tech.md) could increase transparency in markets and reduce [counterparty risk](../concepts/counterparty-risk.md). But it currently is unclear how. However these technologies could also create [systemic risk](../concepts/systemic-risk.md) if left unregulated.
|
||||
|
||||
> President Biden’s Executive Order calls on the Financial Stability Oversight Council to identify specific financial stability risks and regulatory gaps posed by various types of digital assets and make recommendations to address them. While I don’t know what the FSOC will find or conclude, there is one basic lesson that should apply…
|
||||
|
||||
We don't know what to do yet. But [regulation](../concepts/regulation.md) should be guided by some basic principles.
|
||||
|
||||
**III. Regulation should be based on risks and activities, not specific technologies**
|
||||
|
||||
> When new technologies enable new activities, products, and services, financial regulations need to adjust. But, that process should be guided by the risks associated with the services provided to households and businesses, not the underlying technology.
|
||||
|
||||
The underlying technology (be it [blockchain](../concepts/blockchain.md) or not) does not matter so much as *what* people are doing. And if what they are doing comes attached to consumer risk. (i.e. creating a lending platform on a blockchain does not alter the fact that people are issuing loans which is a regulated activity)
|
||||
|
||||
> Wherever possible, regulation should be “tech neutral.” For example, consumers, investors, and businesses should be protected from fraud and misleading statements regardless of whether assets are stored on a balance sheet or distributed ledger. Similarly, firms that hold customer assets should be required to ensure those assets are not lost, stolen, or used without the customer’s permission. And, taxpayers should receive the same type of tax reporting on digital asset transactions that they receive for transactions in stocks and bonds, so that they have the information they need to report their income to the IRS. Under the Executive Order, we will work to make sure consumers, investors, and businesses have adequate protections from fraud and theft, privacy and data breaches, and unfair and abusive practices. Great care must also be applied to ensure innovations do not cause disparate harm to vulnerable communities or exacerbate social, racial, or economic inequities.
|
||||
|
||||
The administration wants to regulate activities, not the underlying technology.
|
||||
|
||||
> In many cases, regulators have authorities they can use to promote these objectives and Treasury supports those efforts. If people are breaking the law and exploiting the interests of others, they should be held accountable. To the extent there are gaps, we will make policy recommendations, including assessment of potential regulatory actions and legislative changes. Continuing to update and improve our regulatory architecture will support US economic competitiveness and reinforce leadership in the global financial system.
|
||||
|
||||
The United States is committed to having the best financial infrastructure in the world and is willing to shape policy and invest in this effort.
|
||||
|
||||
> The principle of tech neutrality is also applicable to concerns related to tax evasion, illicit finance, and national security – topics that are particularly pertinent in the world today. It’s illegal to evade taxes, launder money, or avoid sanctions. It doesn’t matter whether you’re using checks, wires, or cryptocurrency. For nearly a decade, Treasury has been monitoring innovations in digital assets and updating our rules and guidance to clarify the application of our Anti-Money Laundering and Countering the Financing of Terrorism framework to the digital asset ecosystem. We’ve also been working with our international counterparts to strengthen AML/CFT programs abroad to better protect against exploitation by illegal actors. And, we’ll continue to take action when appropriate. Just this week, Treasury’s Office of Foreign Assets Control took strong action against the world’s largest and most prominent darknet market, Hydra, as well as Garantex, a ransomware-enabling virtual currency exchange. Under the President’s Executive Order, Treasury and colleagues across the Administration will build upon the recently published National Risk Assessments, which identify key illicit financing risks associated with digital assets. We’ll also work with our allies and partners to help ensure international frameworks, capabilities, standards, and partnerships are aligned and adequately responsive to risks.
|
||||
|
||||
Crypto needs to be brought within the normal [KYC](../concepts/kyc.md) / [AML](../concepts/aml.md) / [CTF](../concepts/ctf.md) framework that almost every other financial service provider that interacts with US person's needs to comply with.
|
||||
|
||||
> Although innovations in computing have accelerated the pace of change, even the most foundational building blocks of our economy – including our money itself – have evolved dramatically over time. This ties into my next lesson…
|
||||
|
||||
The nature of [money](../concepts/money.md) may change over time but needs to be guided by an overarching theory and philosophy which serves the nation's interests.
|
||||
|
||||
**IV. Sovereign money is the core of a well-functioning financial system and the US benefits from the central role the dollar and US financial institutions play in global finance**
|
||||
|
||||
> It took time for the United States to establish a uniform national currency.
|
||||
|
||||
> In 1790, Secretary Alexander Hamilton bemoaned what he called the “immense disorder” of the US monetary system. At the time, Americans relied on a variety of domestic and international currencies circulating simultaneously. The proliferation of different forms of “money” made it difficult to run the economy. To help address these concerns, the Bank of the United States was formed in 1791 and issued notes that provided a relatively stable national currency. In 1792, the Coinage Act was passed, creating the US Mint and kicking off a century of debate about whether the dollar should be pegged to silver or gold.
|
||||
|
||||
The United States experimented with [private money](../concepts/private-money.md) during the Wildcat Banking era.
|
||||
|
||||
> While these important innovations helped standardize the backing of the dollar, the Bank of the United States did not have lasting political support. By the mid-1800s, the country relied on a fragmented system of paper notes issued by private banks. New Jersey banks issued notes that were different from the ones issued in New Hampshire or New York. And, because different banks were not seen to carry the same risks, people valued the notes differently. This system of private money did function to a degree, but it made transactions expensive and inefficient, and it contributed to bank runs for many decades.
|
||||
|
||||
The Wildcat Banking era was terrible and thus the United States nationalized the dollar and never looked back.
|
||||
|
||||
> A crisis catalyzed reform. Embroiled in the Civil War, President Lincoln and Treasury Secretary Salmon Chase needed to introduce more stability to our financial system. Congress passed the National Bank Act, which allowed banks to issue national bank notes, but the banks had to be adequately supervised and the notes were required to be backed with U.S. Treasuries. This requirement ensured that a dollar in New Jersey was always as good as a dollar in New Hampshire. Later, the Federal Reserve Act further institutionalized the national objective of a uniform currency.
|
||||
|
||||
[Private money](../concepts/private-money.md) is a *really* bad idea. It was a bad idea back in the 1800s and its a bad idea in 2022. This is brought up because many [crypto assets](../concepts/cryptoasset.md) aspire to be a form of private money that is not backed by a sovereign state.
|
||||
|
||||
> The development of our currency to its current form has been a dynamic process that took place over centuries. Today, monetary sovereignty and uniform currency have brought clear benefits for economic growth and stability. Our approach to digital assets must be guided by the appreciation of those benefits.
|
||||
|
||||
Our current [fiat monetary](../concepts/fiat-money.md) system works very well.
|
||||
|
||||
> Some have suggested a CBDC could be the next evolution in our currency. A recent report by the Federal Reserve opened a public dialogue about CBDCs and the potential benefits and risks that could be associated with issuing one in the US. The President’s Executive Order calls for us to consider this question from several perspectives. For example, what impact would a US CBDC have for implementing macro stabilization policies and private credit creation? Could it make the financial system more equitable, accessible, and inclusive? How could it be designed to manage risks associated with national security and financial crime, while including privacy protections? How might a US CBDC interact with existing national currencies, foreign CBDCs or private stablecoins?
|
||||
|
||||
[CBDCs](../concepts/cbdc.md) are an interesting idea. We're looking into it. But there are a lot of open questions.
|
||||
|
||||
> We need to consider these important questions in the context of the central role the dollar plays in the world economy.
|
||||
|
||||
> The dollar is the mostly widely used currency for global trade and finance. It is by far the most traded currency, accounting for nearly 90% of one leg in foreign exchange transactions and over half of trading invoices. US dollar-denominated assets account for about half of cross-border bank claims and more than 40% of outstanding international debt securities. And with the dollar’s strong trade and financial linkages—as well as strong US macroeconomic and monetary credibility—central banks have chosen to hold nearly 60% of their foreign exchange reserves in dollars.
|
||||
|
||||
The dollar is the world's [reserve currency](../concepts/reserve-currency.md) and this exorbitant privilege grants the United States enormous influence in the global financial world. We don't want to threaten this.
|
||||
|
||||
> The dollar’s international prominence is strongly supported by US institutions and policies; US economic performance; open, deep and liquid financial markets; rule of law; and a commitment to a free-floating currency. As citizens of this country, we derive significant economic and national security benefits from the unique role the dollar and US financial institutions play in the global financial system. The President’s Executive Order asks us to consider whether and how the issuance of a public CBDC would support this role.
|
||||
|
||||
The fiat system post [Bretton Woods](../concepts/bretton-woods.md) has worked very well and the United States has no interest in so-called [sound money](../concepts/sound-money.md) systems. The free floating [Keynesian](../concepts/keynsian-economics.md) regime run by the [central bank](../concepts/central-banks.md) works very well.
|
||||
|
||||
> I don’t yet know the conclusions we will reach, but we must be clear that issuing a CBDC would likely present a major design and engineering challenge that would require years of development, not months. So, I share the President’s urgency in pulling forward research to understand the challenges and opportunities a CBDC could present to American interests.
|
||||
|
||||
We'll study [CBDCs](../concepts/cbdc.md) some more. But it remains unclear what to do at this point in time.
|
||||
|
||||
> As we consider these big choices, we must also remember that technology-driven financial innovation is inherently cross-border and requires international cooperation. We have a strong interest in ensuring that innovation does not lead to a fragmentation in international payment architectures and that the development of digital asset technologies is consistent with our values and laws. And this underscores my final lesson…
|
||||
|
||||
There are potentially serious downsides to drastic financial reconfiguration and private money is a bad idea because it leads to fragmentation of the economy when we actually want the [dollar](../concepts/dollar.md) to be central to everything.
|
||||
|
||||
**V. We need to work together to ensure responsible innovation**
|
||||
|
||||
> Many of the most groundbreaking innovations in our history have involved all of us: policymakers and businesspeople, advocates, scholars, inventors, and citizens. Think of the development of the national highway system, the space race, the creation of the internet, or the ongoing revolution in biotechnology. All of these innovations have transformed the way we live our lives.
|
||||
|
||||
Innovation is good. America is good at innovation. Let's do more of this.
|
||||
|
||||
> People have a wide range of views when it comes to digital assets. On one hand, some proponents speak as if the technology is so radically and beneficially transformative that the government should step back completely and let innovation take its course. On the other hand, skeptics see limited, if any, value in this technology and associated products and advocate that the government take a much more restrictive approach. Such divergence of perspectives has often been associated with new and transformative technologies.
|
||||
|
||||
There is a lot of debate about this topic inside the administration.
|
||||
|
||||
> In my view, the government’s role should be to ensure responsible innovation – innovation that works for all Americans, protects our national security interests and our planet, and contributes to our economic competitiveness and growth. Such responsible innovation should reflect thoughtful public-private dialogue and take account of the many lessons we’ve learned throughout our financial history.
|
||||
|
||||
> This sort of pragmatism has served us well in the past and I believe it is the right approach today. Thank you again for having me, and for the important role American University plays in the civic and academic life of our country.
|
||||
|
||||
Democracy involves public debate. Debate is good. This is how America progresses.
|
||||
|
||||
***
|
||||
|
|
@ -1,3 +1,5 @@
|
|||
import Link from 'next/link'
|
||||
|
||||
export default function Features() {
|
||||
return (
|
||||
<div className="relative bg-white dark:bg-transparent pt-16 pb-32 overflow-hidden">
|
||||
|
|
@ -13,12 +15,13 @@ export default function Features() {
|
|||
Blockchain, tokens, NFTs, DAOs - what does it all mean? Our guide provides an accessible overview of the key concepts in Crypto and Web3.
|
||||
</p>
|
||||
<div className="mt-6">
|
||||
<a
|
||||
href="/guide/"
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Discover
|
||||
</a>
|
||||
<Link href="/guide/">
|
||||
<a
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Discover
|
||||
</a>
|
||||
</Link>
|
||||
</div>
|
||||
</div>
|
||||
</div>
|
||||
|
|
@ -46,12 +49,14 @@ export default function Features() {
|
|||
Want to learn more? We are maintaining a comprehensive library of articles, papers, books and other materials related to the space and the surrounding discourse. It provides deeper background on specific topics along with everything you need to fully engage with, and evaluate, Web3 and the claims being made about it.
|
||||
</p>
|
||||
<div className="mt-6">
|
||||
<a
|
||||
href="/library/"
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Explore
|
||||
</a>
|
||||
<Link href="/library/">
|
||||
<a
|
||||
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Explore
|
||||
</a>
|
||||
</Link>
|
||||
</div>
|
||||
</div>
|
||||
</div>
|
||||
|
|
@ -79,12 +84,13 @@ export default function Features() {
|
|||
Crypto and Web3 are associated with many bold claims. From classic technology boosterism of better and faster, to the radical transformation of our societies. But huge controversy surrounds these claims, and there’s a lack of agreement on even basic points and definitions.
|
||||
</p>
|
||||
<div className="mt-6">
|
||||
<a
|
||||
href="/claims"
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Learn More
|
||||
</a>
|
||||
<Link href="/claims">
|
||||
<a
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Learn More
|
||||
</a>
|
||||
</Link>
|
||||
</div>
|
||||
</div>
|
||||
</div>
|
||||
|
|
|
|||
|
|
@ -1,3 +1,5 @@
|
|||
import Link from 'next/link'
|
||||
|
||||
export default function GetInvolved() {
|
||||
return (
|
||||
<div className="relative bg-white dark:bg-transparent pt-16 pb-32 overflow-hidden">
|
||||
|
|
@ -22,12 +24,13 @@ export default function GetInvolved() {
|
|||
<li> Share the work with others. </li>
|
||||
</ul>
|
||||
<div className="mt-6">
|
||||
<a
|
||||
href="/contribute/"
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Get Involved
|
||||
</a>
|
||||
<Link href="/contribute/">
|
||||
<a
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Get Involved
|
||||
</a>
|
||||
</Link>
|
||||
</div>
|
||||
</div>
|
||||
</div>
|
||||
|
|
|
|||
|
|
@ -1,3 +1,5 @@
|
|||
import Link from 'next/link'
|
||||
|
||||
export default function Why() {
|
||||
return (
|
||||
<div className="relative bg-white dark:bg-transparent pt-16 pb-32 overflow-hidden">
|
||||
|
|
@ -25,12 +27,13 @@ export default function Why() {
|
|||
not an easy topic to make sense of.
|
||||
</p>
|
||||
<div className="mt-6">
|
||||
<a
|
||||
href="/about/"
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Read More
|
||||
</a>
|
||||
<Link href="/about/">
|
||||
<a
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Read More
|
||||
</a>
|
||||
</Link>
|
||||
</div>
|
||||
</div>
|
||||
</div>
|
||||
|
|
@ -65,12 +68,13 @@ export default function Why() {
|
|||
change).
|
||||
</p>
|
||||
<div className="mt-6">
|
||||
<a
|
||||
href="/about/"
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Read More
|
||||
</a>
|
||||
<Link href="/about/">
|
||||
<a
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Read More
|
||||
</a>
|
||||
</Link>
|
||||
</div>
|
||||
</div>
|
||||
</div>
|
||||
|
|
@ -102,12 +106,13 @@ export default function Why() {
|
|||
questions to ask and the process of answering them.
|
||||
</p>
|
||||
<div className="mt-6">
|
||||
<a
|
||||
href="/about"
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Read More
|
||||
</a>
|
||||
<Link href="/about">
|
||||
<a
|
||||
className="inline-flex px-4 py-2 border border-transparent text-base font-medium rounded-md shadow-sm text-white bg-yellow-500 hover:bg-yellow-400"
|
||||
>
|
||||
Read More
|
||||
</a>
|
||||
</Link>
|
||||
</div>
|
||||
</div>
|
||||
</div>
|
||||
|
|
|
|||
Loading…
Reference in New Issue