Yves here. This important piece does not merely document why and how Democrats, who had formerly been crypto opponents or at least ambivalent, joined the Republicans as backers after the FTX meltdown. It also explains why crypto payments systems are fundamentally slower and higher cost than traditional methods, as well as being vulnerable to runs and with quantum computing, cracking their encryption. The big reason they look cheaper is due to a much lower level of legal and customer protection. As the authors warn:
The US is now in the midst of a collision between two giant financial systems—traditional banking and crypto—with neither adequately regulated to serve the public interest and both lobbying for still more deregulation….
Current crypto systems combine low cost and low security. They may evolve into something more useful, but right now, as a group and, often, individually, they present serious risks that money-driven politics is systematically obscuring…. Meanwhile, the regulatory infrastructure needed to protect the public –from ransomware, money laundering, cyberattacks, and financial instability—is neglected or being actively dismantled, as federal enforcement pulls back.
By Thomas Ferguson, Professor Emeritus, University of Massachusetts, Boston, Jie Chen, University Statistician, University of Massachusetts, Matthias Lalisse, Ph.D. in Cognitive Science (Neural Networks) from Johns Hopkins University, and Paul Jorgensen, Associate Professor, School of Interdisciplinary Program and Community Engagement, University of Texas Rio Grande Valley. Originally published at the Institute for New Economic Thinking website
In November 2022, the giant cryptocurrency exchange FTX filed for bankruptcy. The shocking collapse triggered runs on other crypto firms, forcing several to close, along with two major banks, while crestfallen venture capital and sovereign wealth funds suffered millions in forced write-downs. Crypto looked on the brink of financial nuclear winter.
Yet less than three years later, crypto staged a triumphant Second Coming. On July 18, 2025, President Trump signed into law the GENIUS Act—short for Guiding and Establishing National Innovation for U.S. Stablecoins. Industry leaders rattled off a litany of benefits they claimed would flow from the legislation, from cheaper payments to a stronger worldwide demand for dollars.
The industry’s phoenix-like resurrection is well documented on the Republican side. Key crypto billionaires aligned with Trump early in the 2024 campaign, transforming him from a skeptic into a champion. The President and his family invested heavily with some and profited giddily from regulatory momentum that helped vault him 118 spots on the Forbes 400 list of richest Americans. The President’s strong support and the firehose of political money that industry stalwarts showered on Republican legislators leaves little mystery about how crypto won there.
But crypto’s conquest of the Republicans is only part of its ascent. Less discussed is how crypto is advancing among Democrats. This is the topic of our new INET working paper.
Realignment Among the Democrats
In 2024, when crypto-friendly legislation came to votes in the House, most Democrats followed the Biden administration’s lead in rejecting it. The President and his key regulators—especially Securities and Exchange Commission Chair Gary Gensler—remained highly skeptical. Top Federal Reserve officials, like nearly all leaders of major banks at the time, shared their reserve.
But in 2025, something changed. Fully 102 House Democrats voted for the GENIUS Act, and 78—more than double the number expected—joined Republicans to pass a companion Clarity Act pushed by crypto advocates to define key regulatory issues beyond stablecoins. The latter did not pass the Senate; it remains a topic of intense debate that no longer breaks down along strict partisan lines.
We examined voting by House Democrats for both the GENIUS Act and the Clarity Act. Our working paper’s “Statistical Appendix” sets out our model in full; here we explain our findings in non-technical terms. Surprisingly, what did not explain the Democratic votes proved as revealing as what did. Trump-Harris vote differences in districts did not matter. Neither did lawmakers’ margins of victory, their ages, or state-specific factors. Instead, crypto support correlates closely with wealth, ideology, and financial contributions.
For the GENIUS Act, legislators from districts with more high-income households were more likely to vote yes: for every 1% increase in households earning over $200,000, the odds of a yes vote rose by 7.4%.
More conservative Democrats — based on several standard measures of Congressional ideology — were also more likely to vote yes, with one or two notable outliers among progressives.
The total amount of money legislators received from crypto interests helped predict their votes. For every $1,000 increase in total contributions, the odds of voting for the GENIUS bill increase by 0.2%. Since contributions often amounted to many thousands (sometimes even hundreds of thousands) this effect cannot be neglected.
These results echo our previous study of Congress and the weakening of Dodd-Frank financial reforms. There, each additional $100,000 in contributions raised the odds a legislator would vote to weaken financial regulation by 13.9%. Some members received substantially more—and voted accordingly.
The Larger Context
Dodd-Frank’s erosion really mattered. Under Trump and Jerome Powell, the Federal Reserve chipped away at tighter banking regulations. When Biden’s team attempted a reset around Basel III capital requirements, the effort petered out as Trump reemerged as a champion of further deregulation. By January 2025, top regulators at the Bank of England and the Bank for International Settlements were openly voicing fears that the United States could set off a race to the bottom in global financial regulation. A strong signal came from reports that UBS, the giant Swiss bank, was seriously considering moving to the U.S. to escape stricter oversight.
This is the context in which the struggle between crypto and mega banks is best appreciated, because adding crypto creates distinctive new dangers.
Dubious Claims About Technology
Setting aside bitcoin and meme coins—essentially gambling, as recent roller coaster swings illustrate—the real policy battle centers on stablecoins. Proponents claim these represent genuine technological innovation, a “better mousetrap” for payments.
We are skeptical.
Blockchain technology remains relatively slow and cannot handle high transaction volumes. It is also clunky, often expensively so. Many stablecoins are designed to function like walled gardens, trapping users in ecosystems that make exits costly. Switching between stablecoins involves fees and charges. And stablecoins are not federally insured, so runs are likely to be lightning fast.
Some analysts have suggested on theoretical grounds that blockchain’s underlying security mechanism has poor scaling characteristics compared to conventional rule of law. Since the rewards for a successful attack swell with the network’s value, so would the resources needed to deter attacks. As more users enlist, more cash and circuits must be burned to enforce trust. With power costs skyrocketing as Large Language Models proliferate, such misgivings can only increase.
At a more fundamental level, if blockchain technology could be made as swift and efficient as stablecoin advocates envision, central banks could simply implement one themselves and provide the service directly to citizens at very low cost. Such a universal system would allow the resulting economies of scale to benefit the public rather than private oligopolies and facilitate innovation in the rest of the economy by reducing costs of operations for everyone else.
Right now, for example, the Brazilian central bank runs a hugely successful instant payment system that makes transfers at no cost to individuals and at much lower rates than private credit cards for businesses. It does not run on blockchain, but on a database owned and managed by the central bank, which also superintends its cybersecurity. According to the International Monetary Fund, encrypted payments in the system settle in seconds, compared to two days for debit cards and 28 days for credit cards.
The lesson for regulators and the public is to beware hype about “21st century systems”: all payment systems transmit at roughly the speed of light even if the amount of information flowing through them varies. Their economically important differences lie in information checks, security protocols, regulatory supervision and, crucially, how many intermediaries take toll along the way. Plus, of course, who gets to hold the means of payment and for how long.
Tellingly, all the interest groups in the struggle over the GENIUS and Clarity Acts strongly oppose central bank digital currencies. Neither traditional banks nor stablecoin issuers want competition from government-provided digital payment systems.
This alignment between the rivals speaks volumes, and it is striking how each side’s arguments in favor of its payment scheme evolve over time. Keeping payments data out of the hands of government was long a universal rallying cry, but it is now so obviously specious it is heard less and less. Advocates just talk past how simple it is for data brokers to buy and resell people’s “private” data. Indeed lobbying battles are now erupting over whether banks can be forced to share client data with crypto firms.
The Remittance Question
Our study yielded one unexpected result: districts with higher percentages of Hispanic constituents were more likely to see their legislators vote for pro-crypto legislation. For every 1% increase in a district’s percent Hispanic, the odds that its representative voted for the GENIUS Act increase by 3.1%. Since percentages vary substantially, the effect is sometimes sizeable. Initially this result puzzled us, but a review of claims by advocates in and out of Congress reveals heavy emphasis on how crypto might lower the costs of international money transfers. These matter greatly for immigrant communities sending money to families abroad; by far the largest flows involve Mexico.
Whether these cost savings materialize in practice is hard to say. The collision between traditional financial systems and crypto is creating complex, evolving market dynamics. Traditional bank remittance fees remain high, though fees and charges for getting in and out of blockchains are sometimes sizeable. Banks—which once complained bitterly about “know your customer” regulations—now sometimes quietly point to them as an advantage for customers.
The underlying problem is that major banks have long since abandoned poorer customers. A 2023 FDIC study found that almost a fifth of the U.S. population has little or no access to banking services. The situation is reminiscent of the well-known food deserts in many large cities: a recent Federal Reserve Bank of Atlanta study showed that highly consolidated grocery chains often consider doing business in low-income areas not worth the effort, seeing the potential rewards as too small.
Independent studies of the costs of remittances suggest that competition in sending money abroad has failed, just like it has in credit cards. A report by the Bank for International Settlements and the World Bank Group pointed out the “thin profit margins for basic account providers [of banking services]. Some respondents noted that there is little economic incentive for private sector parties to provide these accounts.”
This market failure has given crypto firms an opening they shouldn’t have. The solution isn’t necessarily crypto deregulation—it’s ensuring financial institutions serve all communities adequately with controls on crypto that are equivalent to best practice in banking.
The Dark Side
The remittance question is inseparable from crypto’s role in criminal activity. For all the glowing praise of blockchain transparency, many crucial parts of crypto are anything but transparent. It is easy to disguise the ownership of crypto wallets, for example. Ransomware attackers almost always demand payment in crypto, typically Bitcoin. Corporate executives have described watching ransom payments vanish into the blockchain, bouncing between wallets and exchanges before ending up in casinos and splitting into countless untraceable fragments.
One of the clearest depictions of the scale of the problem is Jeff White’s Rinsed. Crypto ATMs are overwhelmingly concentrated in poor neighborhoods, facilitating various forms of money laundering. Most allow users to buy crypto, but not usually to get out of it. Criminals recruit individuals to conduct transactions by providing small amounts of money on bank cards—a common laundering technique that operates both domestically and internationally.
The philanthropic activities abroad touted by some stablecoin proponents deserve scrutiny through this lens. The blockchain isn’t just a technology—it’s an ecosystem of intermediaries including crypto wallets, brokers, and dealers, many operating in highly concentrated networks that allow operators to move money in and out of customers’ pockets with minimal oversight.
Big Money and How Lawmaking Really Works
The GENIUS Act appeared to prohibit interest payments on stablecoins. The provision was a major factor persuading traditional banking groups not to move strongly against the legislation. That prohibition has already broken down. One major stablecoin issuer is already advertising 10 percent returns for “loaning out” stablecoins through affiliated but technically separate entities. All sides are appealing to regulators and to Congress to do something.
The new legislation in theory requires stablecoin issuers to function as “narrow banks” – they are allowed to hold only very short term, (hopefully) highly liquid assets that can be sold on demand against any run on their stablecoins. The supervisory structure to enforce this is complicated and is in fact a work in progress. It relies on public attestations by firm executives and audits by accounting firms as early screening devices as well as supervision by different regulators depending on the size of institutions. But with regulators under budgetary and political pressure, how this will work in practice remains to be seen. Reminding many observers of the bad old days of pre-Civil War wildcat banking, the system appears highly vulnerable. The recent downgrade of Tether by S&P Global Ratings is a fire bell ringing in the night.
The situation is paradigmatic for the problems of a money-driven political system. When big money flows freely, crucial details get worked out long after a law has passed, in heavily technical discussions far away from public consideration, under pressure to conserve regulators’ time and resources, including some who are transiting from one revolving door to another.
Cyber Storm on the Horizon
There is more, alas. Both finance and crypto now face challenging new problems: above all, cybersecurity.
Here is where the regulatory race to the bottom meets galloping technology. The new administration drastically curtailed many important regulatory bodies as soon as it came to power, by cutting their budgets or simply sweeping them away. It dismissed the Justice Department’s National Currency Enforcement Team. It eliminated the Corporate Transparency Act that Treasury Secretary Janet Yellen had championed to control shell companies and improve financial transparency and neutered the Consumer Financial Protection Agency. Under Trump, the SEC has also pursued a unique, hands off policy toward crypto. These aren’t random policy adjustments – they represent a systematic dismantling of the regulatory infrastructure vital to preventing financial crime, just as technological changes pose dramatic new types of threats.
Alarmingly, the latest statement of the new administration’s National Security strategy does not even mention cybersecurity as a priority.
The omission is consequential. Under Biden, the Cybersecurity and Infrastructure Security Agency (CISA) struggled to convince companies to take cybersecurity seriously. Big budget cuts and the government shutdown have left it reelingunder a new acting director who failed a polygraph test. Even at its old strength, the task was daunting: Competing firms are very reluctant to acknowledge failures, as the chilling example of Solar Winds illustrates. Companies that do tackle security risks can find themselves losing business to more feckless competitors, as has shown vividly in discussions of insurers who underpriced risks before recent California wildfires.
Private insurance markets cannot solve such problems because, as Daniel Schwarcz and Josephine Wolff have documented, insurers cannot adequately price cyber risk based on actual security incidents and measures taken—in practice they simply charge by firm size or even sector.
The only effective approach is mandatory standards—telling companies a minimum set of safeguards they must put in place. Without such requirements, vulnerabilities will only worsen.
The advent of quantum computing poses this challenge at a wholly new level. At the moment quantum hackers have cracked only very elementary encryption systems. Bitcoin and other systems use much stronger encryption, but it is plain that the combination of artificial intelligence, quantum computing, and autonomous AI agents is creating giant new risks at precisely the moment government regulators appear to be retrenching dramatically.Some months ago, Sam Altman of Open AI warned that the security systems many financial houses rely upon were now easily penetrated by hackers (Associated Press, 2025). A Federal Reserve governor allowed that this was a question that the Fed could perhaps study in collaboration with the tech giants. Since then, however, misgivings about federal government’s interest in cybersecurity have only grown. As one headline summarized the situation at the end of the year, “Fears Mount That US Federal Cybersecurity Is Stagnating—or Worse.”
Conclusion: Two Giant Systems Colliding
The US is now in the midst of a collision between two giant financial systems—traditional banking and crypto—with neither adequately regulated to serve the public interest and both lobbying for still more deregulation. Political money sloshes everywhere in the system, shaping outcomes just as it weakened Dodd-Frank and enabled crypto’s political resurrection after FTX.
The crypto debate is not really about technology or innovation – it’s about power, money, and whether democratic institutions can assert the public interest over private profits.
The situation might be summarized thus: Current crypto systems combine low cost and low security. They may evolve into something more useful, but right now, as a group and, often, individually, they present serious risks that money-driven politics is systematically obscuring – as for example in the emerging crypto-derivatives market. Meanwhile, the regulatory infrastructure needed to protect the public –from ransomware, money laundering, cyberattacks, and financial instability—is neglected or being actively dismantled, as federal enforcement pulls back.
Our research reveals a final significant trend, which we have space here only to mention, not discuss in full. Not just the Republicans, but the Democratic Party is now awash in crypto money. Industry donations run very high indeed to the National Committee and congressional Democratic Leaders, such as Senate Minority Leader Charles Schumer, House Minority Leader Hakeem Jeffries, or the House Minority Whip, Katherine Clark, and some individual legislators. Depending on the election cycle, the sums sometimes run in the millions, not tens or even hundreds of thousands. Our check of the Internal Revenue Service’s roster of 527 funds, which are not counted in the Federal Election Commission tabulations, also reveals crypto cash flowing abundantly to many state Democratic party organizations. These are not reported to the Federal Election Commission, but to the IRS, where they are ignored by the press. It is clear that these massive flows will be a silent backdrop to the debates now raging in the Party over its positions in the 2026 Congressional elections and beyond.
Not to hand out homework (believe me, I have done the homework but am stumped), but can someone please enlighten me on 2 questions I have had from the very beginning regarding Crypto…..
1) Since the very name means hidden, and all the transactions are “hidden”, is there any real use for this other than to enable hiding things from authorities?
2) Investing in crypto and bitcoin to me seems to be the same as investing in ether, air, or miasma. It seems to be the perfect vehicle for complete and total folly and financial annihilation. What does crypto make? How does crypto generate any earnings? Can you actually buy it as a hard asset and hold it in your hand?
Why do I get the feeling that when this whole thing detonates, it may be the biggest financial con job of the ages?
to question 1: crypto is not anonymous or untraceable, it’s only promoted that way by the crypto guys. most people still do not understand this. If it were really anonymous the feds could not have identified, gathered evidence against, and arrested the head of the old Silk Road trading platform.
https://lawenforcementtoday.com/untraceable-crypto-dead-myth-op-ed
I’ve always thought of crypto as a modern South Sea Company digital bubble. / ;)
+1
Late adopter by inclination. Let the alpha and beta testing identify and shake out the problems.
Pseudonymous is a more accurate term. Transactions aren’t actually hidden, because the history of transactions have to be made in a public ledger in order to prevent ‘double spending’ or the exchange of a token that one no longer possesses. The only thing that’s not immediately apparent are wallet addresses, which function like the accounts on the ledger. Because personal information is not present with the wallet address, this is what informs crypto booster’s claims of anonymity.
However, as flora mentioned, there are plenty of computer forensic techniques using network traffic analysis that can allow you to identify the computer network that is conducting transactions on the blockchain. Once someone has that information, if they are a state actor, or an ISP, they can pressure or investigate that part of the network and determine who was conducting those transactions.
There are useful technologies that are used in the implementation of bitcoin and other cryptocurrencies. Merkle trees/blockchains are an interesting way to generate a distributed ledger and use consensus algorithms to maintain that ledger in a decentralized way, where it would take enormous resources for a bad actor to upset or undermine the system.
However to get to IM Doc’s second question, there is nothing inherent about bitcoin or any other cryptocurrency itself that gives it value, other than the fact there are millions of other people who think it has some value. The “Bitcoin/Crypto is valuable because it will always be scarce,” idea doesn’t make sense, because someone else can always create a new cryptocurrency with a different ledger, even if it has the same algorithmic engine underneath it, and apply some meme like doge on top of it to cause it to have a larger adoption than the first cryptocurrency.
Likewise, someone else could develop a new algorithm that allows clearing entries in the ledger to happen faster or require less resources, and greater adoption of that currency will affect the value proposition of the previous one. Imagine if in the 80s, your choice of VHS or Betamax didn’t just affect whether you could replace your video tape player in 5 to 10 years, but also determined whether your 401k could actually be tapped in your retirement or not. Most cryptocurrency suffers from this type of format-wars problem, where without some formal legal adoption and framework, your money might very well end up worthless as everyone withdraws from using the cryptocurrency you converted your assets into, and ends up conducting transactions in some other one.
A user’s anonymity is related to the lack of linkage from a pseudonym to their real identity. This Stack Overflow question helped link Ross Ulbricht a.k.a. ‘Dread Pirate Roberts’ a.k.a. ‘frosty’ to his Silk Road operation:
How can I connect to a Tor hidden service using cURL in PHP?
To have perfect security you’ll need strong cryptography plus perfect execution.
It’s not just amateurs that make mistakes:
The German mistake
The Silk Road guy wasnt caught because the government traced his bitcoin transactions.
They tried but couldnt find him that way.
The way he got found out was that when he originally set up Silk Road and had no customers, he went to a message board and posted an ad for the website. Years later the government found the ad and subpoenaed the website. Turns out he used his personal email address to set up that account.
Using that information, they were able to locate him physically. He spent his days working in a public library so they organized a distraction to make him look away while working then an FBI agent jumped onto his laptop and held it open so he couldnt close it and lock it.
They used the laptop to get all the evidence they used against him.
That article is misinformation. One of the cases they cite is Malone Lam, who stole $200+ million. He was caught because him and his accomplices livestreamed themselves stealing bitcoin and bragging about it.
I agree about crypto being a scam though, 100%. Bitcoin was originally a cool idea but never was going to be able to accomplish its original goals and ended up only being useful for money laundering and hiding.
At least when the Dutch invested in tulip bulbs in the 17th century they arguably had something to show for their investment after the crash. As best I can tell, crypto “earnings” come from selling the electronic ones and zeroes to somebody else who wants them more. Even an Austrian economics believer like myself has heard of The Greater Fool Theory. Like any other craze, getting in on the bottom floor and then bailing and converting before the crash is a preferred strategy.
The problem with hiding things from the authorities – and I am not necessarily averse to the concept in some cases – is that the hider also foregoes any possibility of protection or redress by the authorities of the hidden assets. One does not see many cases on the small claims docket where the plaintiff did not receive the proper weight or quality of cocaine, for instance…
Still do. I once saw an exhibition in Genoa that included vases for displaying your overpriced tulips. I don’t see that happening with crypto.
Framed screenshots, maybe? :-)
the “crypto” part comes into play as in: cryptocurrency can’t be created outside of its original parameters, ie, no fiat “brrrrrr…” printing press.
irony #1: gold is the ultimate “crypto” cuŕrency, infinitely smelt-able
irony #2: the whole crypto craze has hurried development of real-time bank transfer settlements (partly negating one of the original “advantages” of crypto…unless you really want to send your next $20 MM wire in crypto, ie. no established legal protections similar to US wires, aka no backsies lmao.)
Cryptocurrency is a massive scam that exploits the world’s trust in the United States. Had it been invented in any other country, it would not have been taken seriously.
Unless bitcoin was a secret CIA/NSA invention, there is no agreed-upon country of origin.
The fact that the world’s most fantastic intelligence agencies have never identified the mysterious Satoshi Nakamoto suggets to me the former.
Perhaps this is a challenge only a thousand new datacentres will be able to meet. After all, if we have tabs on everyone on the planet and everything they do, he must be somewhere to be found
I dunno re invention, but Mike Walz says the biggest user of crypto by volume is intel agencies.
regarding question #2..
Crypto makes nothing. It seems to have been originally intended as a way to bypass traditional banking and its restrictions (and protections). Some crypto projects, such as Ethereum, are attempting to create something, but so far it’s mostly just been scams and rug pulls.
Crypto generates earnings like any other asset: buy low, sell high
You can’t hold crypto in your hand, at least not directly. There are hardware wallets (Trezor, Ledger, etc), which are physical things you can hold. But the hardware wallet is just a way to remove the private key from your computer, making it harder to steal your funds.
Bitcoin is based heavily on public key encryption – an old but proven technology. Your wallet address is actually a public key, and hidden inside your wallet (software or hardware) is a private key. Any transaction you do is “signed” with your private key, and its authenticity can be verified by anyone by using your public key (aka wallet address). When a hacker steals your crypto, it just means they got ahold of your private key. That gives them the means to send your funds to themselves.
Imagine a bank of bus station lockers. Each locker has some cash in it. In your hand is a key that opens your locker. You can open your locker, remove some cash, and pay someone else by slipping it through the little vent slot on their locker door. No refunds or take-backs. Others pay you the same way. Crypto is just like that, except you cant touch anything. Except maybe a hardware wallet.
It is actually the opposite. THese transactions are all clearly and permanently documented preventing actual anonymity
It’s electronic beanie babies.
1) You can look at the website of the multi-billion dollar company (and now also federally chartered bank as of December 2025) Ripple Labs to see what kinds of services they provide to institutions. Almost everything they do is based around the XRPL, and the XRPL’s native token XRP.
Ripple is more or less connected to everyone and everything in finance today. While theoreticians can still argue about whether digital assets could ever be legitimate or effective inside the world’s financial plumbing, as of today in early 2026 digital asset rails are already being integrated into worldwide financial systems, and they are just about ready for use. I am guessing that during the next big financial crisis (probably timed and engineered for the most impact) they’ll simply be switched on and people will just find out about it whenever the banks reopen.
2) Bitcoin is pretty useless and doesn’t do much of anything. Many claim that it’s a “store of value” and in that sense I guess it’s like a novelty collectable, like a fungible baseball card. I’d contrast Bitcoin and meme coins with digital assets that were successfully designed and implemented with utility in mind.
Prior to 1990, who could have imagined what the internet would do for society?The internet made sharing information and sending messages nearly instant and nearly free. Likewise the Internet of value, maybe we could call it the finternet, based on distributed ledger technology, will make sending value as fast and cheap as sending emails.
Ripple? Really? Ripple?? The once upon a time cheapest college “wine” drink for partying? Ripple? The ultra cheap “wine” for college frat parties? It’s too funny.
NO. The biggest con job is AI, aka Apocalyptic Idiocy…
Thanks for this post.
Anecdotally, the one acquaintance I have that admitted to owning crypto got a phone call early one morning purporting to be policing fraud asked said acquaintance to share the screen and poof, it was gone leading to some serious depression. Use caution.
A lot of words here to describe research findings which support a simple truth.
Cryptocurrency is useful in transferring wealth from the public to the ruling class.
Therefore, it will be adopted, promoted, and legitimized by said ruling class.
Everything else about cryptocurrency is irrelevant — the terrible inefficient technology, the social harms, it’s democratically corrosive properties, it’s all just noise.
Neoliberal economic doctrine is one simple question: Does it increase wealth for the ruling class?
If yes, then pass GO, collect two-hundred billion dollars.
Nothing. Else. Matters.
This study shows that if you are part of the ruling class, you are more likely to support cryptocurrency. Given the above, who would’a thunk it.
“But surely this cannot be! Our economy is just, and rational, and our betters wish for all humankind to lead better lives.”
Payday loans.
Monopoly.
Environmental degradation.
War profiteering.
Starvation.
For profit healthcare.
Enshitification.
Regulatory capture.
Etc., etc., etc., the list goes on. All of these things increase wealth for the ruling class, so therefore they must exist. Once the question that drives our entire civilization is understood, then its hardly surprising that cryptocurrency has been so readily ingested by the PMC and the financial institutions which are already built on domestic and foreign exploitation.
The more interesting question may be, how will Cryptocurrency play out?
There is tension between members of the ruling class. While a certain group of oligarchs wishes to use crypto as a wedge to dislodge financial incumbents from their position of dominance, another group is satisfied to use it as good old fashioned wealth transfer device from majority to minority, and let the chips fall where they may. Those who want an economic system that increases the wealth for as many as possible by as much as possible aren’t playing the game.
Let’s not forget it was Gensler, a democratic appointee, who cast the deciding vote for the approval of Bitcoin ETFs, opening the floodgates for mainstream financial adoption of cryptocurrency. Cryptocurrency must be adopted, it must be allowed to spread and strangle the productive economy because it will make more money for the people who matter.
If our non-existent society (there’s no such thing right?) gets smashed along the way, who cares. Well, maybe the poors, but they can fuck off and die.
Thucydides did warn me that the strong do what they can and the weak suffer what they must, so maybe Neoliberalism isn’t to blame after all.
I think the AI bubble has the same purpose.
Crypto just wasn’t working fast enough and always looked as shady as it was.
The AI scam, both founded as an interesting technology (which it had been for 40 years) and a virtuous hail mary for all humanity.
In my opinion, it’s just a cover story to finance the completion of the surveillance state and thereby cement the oligarchy.
That is why it is permitted to burn capital.
They are not selling tulips or cures for cancer, they are selling control.
Follow the money. Look who is getting involved… not to continually point a finger at El Trumpo and his Mob family, but I will, because old habits dies hard….
As I drive around the west (never a hardship) I have lots of time to ponder—- and I realize that I have quite a bent toward Utility in my values/ investments.
So, inasmuch as gold, silver, fiat, crypto really have to do with Full Faith and Credit, they all lack, to varying degrees, situationally. If the goal is hiding activity, obfuscation, they each have limits.
In a jackpot setting, molded lead backed with powder in a convenient form (sadly, yes bullets) might have value, in dire circumstances. a .tube fed bolt action .22. Alcohol. Portable high capacity water filtration systems. Hand tools.
Being broke has its benefits! No money, no savings, no problems. Lotta song lyrics about this…
Until Jackpot, I am thinking we all should be using greenbacks, not credit cards, and certainly not crypto. Stop feeding the many Beasts.
Best wishes and good luck to us all— seems we are going to need it— whether we make our own luck, or however things go and the Fates allow.
Currencies have no value in themselves they are basically bits of paper with a message written on them saying the issuer which is the government of whichever country the currency relates to , will honour the value written on it.
Every dollar you have in your pocket is US govt debt every british pound i have in my pocket is UK govt debt this is the same for all currencies issued bybgovernments across the world.
Each country in the world has only one government and therefore only one legal issuer of its currency.
These notes are basically just a claim on goods and services that you can purchase using that currency.
Each time you purchase something for example a loaf of bread , all you are doing is exchanging your bit of government paper for that loaf of bread you now hold the loaf of bread and the shop now holds your bank note fivedollars or five pounds whatever currency it is they all work the same way.
People trust the government issued currencies.
Another example is that if i live in uk and i go on holiday to for example greece where they use the euro , i can purchase euros here in uk before i go , to do this i go along to my bank or wcurrency exchange and hand over my british pounds say £500 and get the equivelant handed back to me in euros but again all that is happening is that i am swopping my british pounds for euros i now hold the euros my bank or currency exchange now holds my £500.
Cryptocurrencies are issued by many companies in the usa unlike government currencies they cannot be trusted you see the reason government issued currency is trusted is because government also has asystem of tax collection this collection of tax allows a government to avoid too much money being in issue at one time too much in issue at one time can cause inflation and devaluation.
US govt has reduced tax on the rich which has allowed too much money to be in issue and as i said earlier money in issue is basically government debt , the problem is the rich control government and dont want to rebalance so the government debt increases year on year theyve lost control and now want to sink government currency and replace it with crypto this will allow them to write off the government debt and sidestep the looming inflation deflation they deserve.
Other countries around the world dont want to use the us dollar to buy and sell their oil etc but are blackmailed or threatened to ensure they do , for the time being , but if crypto replaces the us dollar all the private companies that administer crypto will try to cash in and can start to build a new USA deficit / debt akin to the US govt deficit / debt i mentioned earlier , beyond that there will be no taxes no government benefits no safety net just 100% privatisation with areturn to charity for the poor and unemployed.
As Varoufakis says, crypto, and stablecoins in particular, is the privatization of money, without even a semblance of public concern or protection.
Ok, Democrats may have largely rejected crypto legislation in 2024, but before FTX got busted, they were not so reluctant. The news at the time was that Sam Bankman Fried was making it rain with campaign contributions to Democrats, but was also less publicly donating to Republicans as well.
I’ve mentioned this before but I think it bears repeating. I happen to know a high ranking Congressional Democrat personally and at a holiday dinner a few years ago, I was speaking with another guest and this Congressperson came by and asked what we were talking about. I mentioned that we were talking about SBF and asked if this Congressperson was familiar with him. I was told that maybe he had passed the Congressperson in the hall a couple times, but that was it. Given that this Congressperson was also a member of the DCCC, the fundraising arm of the party, I didn’t really believe what I was told at all.
As the article briefly mentions (I’d like to see them explain this a little more expansively for readers unacquainted with the era) this looks to me to be just a replay of the era of wildcat banking in the US during the 19th century.
Also, zero surprise that the usual suspects among the corpo-Dems are bellying up to the trough. The sooner that these donor servicing crooks are defenestrated, the better.
An important thing to consider…
The debacle of Continental Currency had so soured the USA on paper money that no Federal banknotes were issued until 1861,
Broken Banknotes (as they are called now in the hobby) filled in the void when specie was scarce. None are issued anymore after Federal banknotes show up, game so over.
The difference between them and the numismatrix was that say a merchant in Ohio that was given a $10 banknote in payment for goods from a New Hampshire bank, had to decide whether the money was good or the bank only existed in the guise of paper money.
The only prop I ever see is in every Bitcoin article I read online, they have to always include a picture of a metallic coin representing it, as packaged air is a hard sell.
You can buy the ‘Bitcoin’ on eBay for five bucks~
NC types would really enjoy reading A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States, by Stephen Mihm
I think this article takes a very US-centric view of the world, and I think that is misplaced.
From the outset, the article starts with the FTX collapse in November 2022 and then jumps to the GENIUS passage in July 2025, characterizing this as a phoenix-like resurrection and tying it to the US presidential election. That is misleading. The year 2022 was characterized by one collapse after another, starting in May of that year: Terra-Luna, Three Arrows Capital, Voyager, Celsius. Then in November it was not only FTX, but also BlockFi and Genesis. Fraud and overleverage caused the collapse. The authors put too much empahsis on FTX, ignoring all the other dominoes. The FTX debacle in November 2022 was close to the bottom of the market. The industry started to recover in January 2023, notwithstanding that the Biden administration and the Gensler SEC were openly hostile to the industry. The industry got another big boost when Greyscale beat the SEC in court in the dispute over the spot bitcoin ETF. Again, this was long before the presidential election made any difference. And even after the election, the crypto market was largely flat after Trump was elected. So the idea that the industry was resurgent because of US politics is a bit misleading.
Second, the US dollar stablecoins were gaining traction long before the US Presidential election — but this was happening overseas in countries where the currencies were getting wrecked, not in the US or developed Western countries. Working class people in Argentina, Lebanon, Turkey and elsewhere wanted to get out of their failing currencies and into the US Dollar, but control over the traditional banking system in those countries made it very difficult to get US Dollars. Tether was a lifeline. That is why Tether grew into a major force long before the US elections.
In many ways the US is the center of the world, but sometimes believing that creates unfortunate blind spots.