China FUD and False Dichotomy, September 20-27

After repeating China’s long-standing crackdown on cryptocurrencies, a particularly influential Crypto Twitter account shows that China has clearly entered the dark side of the battle by banning Bitcoin (BTC), while the collective West must now resolutely throw its weight to the opposite side by hugging the cryptocurrency.

It’s true that the framework for thinking about the relationship between political power and decentralized funding is attractive to crypto allies. However, news from the US suggests that this is how politics see the situation.

It seems that US elites are keen to maintain the established financial order and limit the growth of the digital asset space, albeit with a less elaborate toolkit than their Chinese counterparts. This middle ground approach is likely to put the US somewhere at the center of the dark-light continuum that stretches from China to the still unattainable ideal of a society with a financial system completely free of intermediaries.

More China cryptocurrency bans

The People’s Bank of China statement on Friday that caused a short-lived crypto market crash is at least the 19th instance of a notable wave of FUD that could have emanated from the Asian superpower in the near future over the past 12 years. Historically hostile moves not only haven’t stopped the global growth of the crypto space – they have at times marked great strides for Bitcoin and copper. In the medium term.

US regulator: Similar

In the United States, the chairman of the Securities and Exchange Commission, Gary Gensler, sat down with David Ignatius of The Washington Post to speak specifically about cryptocurrencies. We didn’t learn much new as Gensler chose to use a tiresome set of analogies (and some newer ones) to refute his controversial view that most tech assets are digitally a security. Speaking of stablecoins, the SEC boss compared them to “casino poker chips”.

In the meantime, the country’s largest banking regulator, the Office of the Comptroller of the Currency, could finally get a permanent director at Cornell in Professor Saule Omarova. Omarova is a vocal critic of both big banks and cryptocurrencies – as something that supposedly benefits “the dysfunctional financial system we already have.”

Enforcement Against Crypto Infrastructure?

Last week, the Treasury Department added the Russian-Czech OTC cryptocurrency platform Suex to its list of Special Designated Countries whose trading with US citizens is prohibited. This is the first time a digital asset service provider has been targeted by US sanctions.

Suex was fined for allegedly helping cyber criminals process ransomware payments. While it is unlikely that many legitimate U.S. individuals and companies have sent funds through this particular broker, the move could be a clue to the emerging policy of the Biden government aimed at centralized locations of the digital asset ecosystem.