Updated: Oct 14, 2021
This week, Acting Comptroller of the Currency Michael J. Hsu gave remarks in front of the Blockchain Association, an industry public policy organization. Hsu gave a stark warning about the parallels between crypto and decentralized finance (DeFi), and the derivatives and financial engineering that led to the Global Financial Crisis. “Innovation without purpose”, he said, “was likely to lead to a mountain of fool’s gold.” Leaving aside a critique of Hsu’s analysis of the cause of the global financial crisis, it is important to understand that Bitcoin is not DeFi, nor is it the rest of the digital asset community. It is also very clear to us why Bitcoin was created – it is a form of electronic cash for the digital age that does not rely on trusted third parties. This, along with a programmatic monetary policy [limited to 21M total Bitcoins ever to be issued, in an annual, limited, programmatic manner], is very much a financial innovation with a purpose. We can understand why many in the U.S., especially regulators and those associated with the financial system, may not fully appreciate that purpose. But that does not mean Bitcoin does not have real-world utility for billions of people around the world. That purpose will show itself in ensuing months and years as widespread adoption continues, leading to Bitcoin price increases, as this increasing demand outweighs its limited supply.
In the News: Twitter is going big into crypto starting Friday, Sept. 24. Twitter is making two major updates that will make cryptocurrency integral to its product, with more likely to come. Tipping on Twitter is expanding globally Friday to everyone on Apple’s iOS, and there will now be an option to tip in Bitcoin. Second, Twitter is going to create a way for its users to authenticate the fact that he or she owns the NFT that they use for their profile picture.