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United States Bitcoin

Mnuchin Says Crypto Stablecoins 'Shouldn't Be Like Casino Chips' (bloomberg.com) 55

Posted by msmash from the closer-look dept.
With U.S. financial officials poised to to issue a report on stablecoins, former U.S. Treasury Secretary Steven Mnuchin said the cryptocurrencies designed to be pegged to other assets such as the dollar should be regulated and their underlying funds put into banks. From a report: "They shouldn't be like casino chips," Mnuchin said Thursday at the Bloomberg Invest Global virtual conference. "If you are going to issue a stablecoin, the actual money should go be held in a regulated bank, in a trust account and the people who hold the stablecoins should be able to exchange those for real dollars at any time." Stablecoins are a type of cryptocurrency that, by holding reserves, seek to maintain a fixed exchange-rate with a fiat currency. Bloomberg News reported Thursday that reserves of Tether, the largest such coin with a $69 billion market value, include billions of dollars of short-term loans to large Chinese companies, which is something money-market funds typically avoid. "Stablecoins should be invested in U.S. Treasuries or things that look like U.S. Treasuries -- money-markets of highly liquid, backed investments," said Mnuchin.
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Mnuchin Says Crypto Stablecoins 'Shouldn't Be Like Casino Chips' More

Mnuchin Says Crypto Stablecoins 'Shouldn't Be Like Casino Chips'

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  • Here's a nice video (Score:1, Interesting)

    by rsilvergun ( 571051 )
    On Tether right here [youtu.be]. The TL;DW is that the whole operation appears to me to be as crooked as a dog's hind leg. It seems very likely to me personally that tether does not have the reserves they claim to have. Separate from this video I've also generally heard that the popularity of tether is because it helps with laundering money when you're trying to convert various cryptocurrencies to and from real currencies. In fact all the stable coins are absolutely essential to money laundering.

    The point being th
    • Watching just part of that video makes me think that it's nothing more than money laundering. So one dollar of "tether" is equal to one USD in perpetuity? Just buy the damned dollar.

      That said, there are plenty of reasons for an economy that the govertment can't track. What about, for example, a freedom fighter's underground economy? (Of course, if you're the Powers That Be you refer to that as a domestic terrorist economy.)

      • Honestly it wouldn't help (Score:4, Insightful)

        by rsilvergun ( 571051 ) on Thursday October 07, 2021 @05:01PM (#61870487)
        Folks like to point to Afghanistan but the reason why the Taliban are back in power there is because the United States just got tired of bothering with it. We had total control of the few things in that country that were worth controlling. Freedom fighters cannot win against a modern military and a modern government. We left because the amount of money involved wasn't really worth the trouble anymore.

        It's like that old xkcd comic where the hacker thinks he's going to do this incredible hacking stuff to prevent the government from oppressing him and they take a $5 wrench and beat them with it until he gives up his passwords. The funny thing is they don't even care if he gives up his passwords. The point was just to beat them with the wrench.

        I point this out because people have this romantic view of fighting against the government and right now in America we're seeing democracy basically go away as more and more restrictions are placed on voting. A lot of people don't care because they don't think those restrictions will ever be used against them but there's a lot of people who don't care because they think they can just pick up their rifle and overthrow the government like it's 1776 or something. The funny thing being that even back in 1776 George Washington lamented that militias were useless against trained soldiers...

        What I'm saying is that democracy is like the planet Earth. You only get one so you better protect it first and foremost. Just like you shouldn't pretend you can fly to Mars you shouldn't pretend you can overthrow a government.
        • Man, now you make me want to go grab some Civil War games, Damn you! :)

        • Re: (Score:3)

          by ljw1004 ( 764174 )

          Freedom fighters cannot win against a modern military and a modern government.

          I'd say the exact opposite: modern military cannot win against freedom fighters. (Of course it depends on how you define "freedom fighters" and "win".) What persuaded me was this post: https://imgur.com/gallery/yL77... [imgur.com]

          (1) In Europe at least war used to be about a feudal society in constant conflict. (2) Around Clausewitz it turned into the act of one nation imposing its will on another by defeating the nation, not just its army. (3) Then there are insurgencies, freedom-fighters like Castro or the Mujahadeen

          • you'll find the people in power either lost control of the military or, more often, foreign aid to those freedom fighters let them win. Just like how the US is only a country because of the French.

            The IRA were too close for the kinds of tactics needed. The brutality could be seen. And the British were encouraged to think of the Irish as like them. Again, they didn't win, Brittan gave up because it was more trouble than it was worth. Same thing as the US did with Afghanistan.

            It'll go quite a bit diff

        • more and more restrictions are placed on voting.

          What are you talking about? Having to show an ID card that the government provides for free?

          You must be one of those racists who believe that minorities aren't as capable of obtaining one of those free ID cards.

          I believe they are just as capable.

        • Re: (Score:2)

          by Tom ( 822 )

          Freedom fighters cannot win against a modern military and a modern government. We left because the amount of money involved wasn't really worth the trouble anymore.

          And that, exactly, is how freedom fighters win against a modern military.

    • The sooner the crash, better, in my opinion. I suspect that the serious players cant forge a truly-useful crypto/blockchain ecosystem until a) regulation and b) the system stops being so compatible with criminal enterprise. Maybe people will build a more orderly parallel system while the current ponzi scheme continues to exist. If so, the current system will be relegated to the red-light-crime-alley-district of the internet. You go there at your own peril.
      • The problem is as soon as you regulate it, it loses all its value. Because of fully regulated cryptocurrency is a little more than PayPal, but otherwise much higher costs if it's a mining currency or much higher risks if it's proof of stake. Stable coins are basically just a gift card program.
        • Run an entirely unregulated system, and you wind up with a society like, I dunno Afganistan or Syria, where the dude with the most guns rules by force. Run an over-regulated system, and you wind up with China or North Korea where, strangely enough, the dude with the most guns rules by force. Both extremes produce pretty much the same result, just with a different name. The sweet spot is somewhere in the middle. Crypto needs just the right amount of light regulation to thrive. But zero-regulation is literall

    • Tether Ltd. sucks, but they may get away scot free. The NY Atty General has already buried the hatchet with Tether Ltd./Bitfinex:

      https://uk.practicallaw.thomso... [thomsonreuters.com]

      It's questionable as to whether the Feds will do any better.

      As to money laundering? Sorry, you come across as a joke of a curmudgeon. You don't even try to imagine why people outside of Tether Ltd. might want to use USDT. It was (and still is) useful on unbanked exchanges. The market needs to move on, though, since Tether Ltd. still has the sti

      • The existence of USDC combined with the popularity Tether implies that at least a large minority of traders are using it for money laundering. There's just no good reason to hold Tether over USDC unless you're trying to avoid the US government knowing about your transactions.

        There are also legit uses of Tether. But none of those uses precludes proper audits.

  • And why shouldn't they? (Score:3)

    by SirSpanksALot ( 7630868 ) on Thursday October 07, 2021 @04:56PM (#61870471)
    I quite like the idea of my transactions being private and untraceable... It's not the governments (or anyone elses) business what I do with my money.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      It's not the governments (or anyone elses) business what I do with my money.

      Until that money is used to attack a government or its people - in which case it becomes very much "their business"

      Not that I'm implying you or everyone that uses crypto is up to no good in the neighborhood, but there's quite a few that are, inversely proportionally so in the harm they do with it, and they're why we all can't have nice things(tm).

      • believing that FUD... It's orthogonal to "well why do you want privacy if you have nothing to hide?" (you could also make the case Keynsian/infationary fiscal policy IS a direct attack on the people.)

        That said, I'd wager that the number of people who sincerely just want to be left alone by an increasingly nosy and intrusive government vastly outnumber the boogeymen trying to buy CP, drugs, or whatever the hell else comes to mind when crypto is mentioned here.

        Central banks and bankers in general have proven

        • believing that FUD... It's orthogonal to "well why do you want privacy if you have nothing to hide?" (you could also make the case Keynsian/infationary fiscal policy IS a direct attack on the people.)

          Well both ways taken to the extreme are a bit silly, should you be able to live your life in a shroud of secrecy well no, should financial system be totally unregulated well no. Should there be a level of fundamental privacy yes, should the government be able to monitor every financial transaction people make I don't think so.

          The argument should be about how much and what is reasonable, not a all or nothing approach.

          Slashdot has this weird, schizophrenic attitude towards privacy and freedom. Software: live free or die. Crypto/finance? Mommy government knows best,

          Open source software, has nothing to do with privacy in fact it requires you to show the cod

        • It's already been shown multiple times that the vast majority of cryptocurrency transactions do not involve illegal activity. You won't change anyone's minds with facts!

      • How would someone do that -- throw their cryptocurency wallet at them? The last time I saw money contextualized with violence, it didn't really do much other than a little property damage [youtu.be].

    • USDT transactions are neither private nor untraceable. Ditto for USDC, TUSD, and DAI.

  • could always start their own stablecoin and show everyone how it's done ... or just keep bitching.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      They did, decades ago. By 2000 most US dollars were electronic.

      A few Internet nerds don't like it because it's regulated.

  • Gold standard then please (Score:3)

    by AcidFnTonic ( 791034 ) on Thursday October 07, 2021 @05:15PM (#61870513) Homepage

    This is absolutely hilarious considering the switch away from the gold standard when specifically the government was arguing that they don't have to exchange money for anything else anymore.

    But since it's a stable coin that they don't like nor can regulate now they argue that they need to be on a gold standard when this very government just made policy arguing that was bad law a few decades ago?

  • Mining crypto keys? (Score:4, Interesting)

    by Dadoo ( 899435 ) on Thursday October 07, 2021 @05:25PM (#61870533) Journal

    Something just occurred to me: what is the possibility that one (or all) of the cryptocurrencies are actually crowd-sourcing the mining of TLS keys? Granted, the search space is still pretty large, but I'll bet something like Bitcoin could reduce it significantly, if that's the way it was designed.

    • No mod points, but +1 Insightful.
    • Bitcoin is open-source. If one has that conspiracy theory bouncing around their brain they're free to delve into the code themselves to see if it's happening or not.

      With the desperate amount of FUD surrounding Bitcoin & cryptocurrencies, I suspect people have already done so in an attempt to end this Earth-killing, criminal-helping, Ponzi scheme or whatever. :)

  • Of course they shouldn't (Score:4, Interesting)

    by Krishnoid ( 984597 ) on Thursday October 07, 2021 @05:33PM (#61870561) Journal
    The casinos (or individual tables, God forbid) don't realize income when they exchange dollars for chips, and don't declare a business expense when they pay them back out. So why in all that's good and taxable would a treasury official want exchanges of cryptocurrencies to behave that way?

    Is this what they call a "dog whistle", where he's likening it to gambling, but really he's sending a coded message saying we want all these things to be traced and taxable?

    • The feds are legitimately worried that in the case of runaway inflation parallel economies will develop that they won't be able to (mis)manage; that rider tacked on to the infrastructure bill to instruct the IRS to monitor and collect transactions over $600 is telegraphing that concern.

      So yeah, they want to tax and trace every penny they can.

    • They're already traced and taxable.

  • He's among the best gamblers: helping Sears (and thousands of others) lose their collective ass even faster : https://digitaledition.chicago... [chicagotribune.com]

  • Advice from Mnuchin? No thanks. (Score:3)

    by CptJeanLuc ( 1889586 ) on Friday October 08, 2021 @02:01AM (#61871451)

    Don't care what the man has to say on any subject matter. I prefer to take my advice from people who do not abuse their position to pose with their trophy wife in front of money [go.com] Bond villain style.

  • exchange (Score:2)

    by Tom ( 822 )

    and the people who hold the stablecoins should be able to exchange those for real dollars at any time.

    Just like they can with gold ... oh... wait...

  • Cryptocurrencies from the start have always been touted as safe, unhackable, etc. Too many stories in the past 2-4 years, show how bad you can lose them, based on idiots that keep buying them. Their as safe as a pile of dog poo in a heavy rainstorm !

  • Carrier of zombie economics, and with close ties to fantasyland IQ 45, has any credibility?

  • Why are we listening to what the government wants?

    If they round up some likely voters or something, I can see that.

    People should be forming their own views.

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