1/ JUST BACK from an amazing #roadtrip across my beautiful native state. Here’s #YellowstoneFalls from Artist’s Point—yep, this is real.
Next—warning, I’ll post photos of historically important firearms at Buffalo Bill Museum in Cody, #Wyoming to illustrate 2 points about tech.
2/ Point #1: after centuries of no major advancement in firearms tech, a MASSIVE innovation occurred w/in a 10-yr period right before the US civil war & it’s visible in this exhibit. Invention of the repeating rifle changed the world—literally. Details abt why aren’t important...
3/ ...for this tweetstorm. What matters is that the invention MASSIVELY advanced tech in the industry by rendering everything that came before it utterly obsolete.
The analogy to payment/ledger technology is obvious. This is what #blockchain is doing to legacy payment systems.
4/ Point #2: When govts are slow to adopt new tech they may pay a big price. The rifle on the left was used by the US military at Battle of Little Bighorn. It was outdated but US govt didn’t realize it at the time. Native Americans had traded for repeating rifles (4th from left)
5/ ...& their superior technology was a major factor in their massacre of the US Army at Little Bighorn (also known as Custer’s Last Stand) in 1876. Thereafter the US govt adopted the new tech, and history changed again. The battle over which side controlled the superior tech...
6/ ...went back & forth. Ultimately the US Army won.
The point? Tech matters. It sometimes changes course of history by creating an inflection point. I think we’re approaching one of those inflection points in money & payments now—tho it will only be clear in retrospect.
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QUIET PART OUT LOUD: they're rightly worried abt Hong Kong via USD stablecoins becoming a hub for USD clearing that's outside US's reach, while the US dithers. But it's not just HK. Obvious fast path for Milei to dollarize Argentina is via USD stablecoins. ft.com/content/39f101…
2/ 👇But the US (under Sen Warren's control of the Biden Admin's financial svcs policy) is blocking everyone working on regulatory-compliant USD stablecoins, while letting big banks continue to build their own versions.😡 But the world already blew past the walled-garden versions
3/ And Warren has admitted what she's really up to: she wants a retail #CBDC in the US. And since she controls the Biden Administration's financial services policy, the US is heading toward a CBDC as long as Biden remains in power.
1/ OH BOY...#PrimeTrust's failure just took a BIG turn--its receiver today filed to put it into voluntary Chapter 11 (federal bankruptcy). I was afraid for Prime Trust customers of this very outcome & discussed why in the debate w/ @mikebelshe on @zGuz's podcast last month.
2/ In that debate, I laid out why banks as legal entities better protect customers than state-chartered trust companies in the event of failure--bc the federal bankruptcy process is designed to bring assets into the estate, while bank receivership is designed to protect customers
3/ As a state-chartered trust company (not a bank), #PrimeTrust cld be dragged into federal bankruptcy--& indeed that's now happening. In that debate I mentioned case law precedents where state-chartered non-banks tried to prevent being dragged into federal bankruptcy, but lost.
1/ 🚨ON THE DAY #FedNow is scheduled to launch, I noticed something...interesting, shall we say. 🤔Among the list of banks & credit unions in the Fed-authorized 1st group of participants is a #fintech--& it's a European fintech, not even an American one. So I went digging...
2/ But wait, you're thinking, how does a #fintech even have a Fed master account so it can qualify to clear US$ payments at the Fed--isn't the Fed keeping #fintechs out???
Yes, yes it is--except for certain fintechs. Europe lets its fintechs qualify for special bank charters.
3/ And the Fed lets foreign bank branches have Fed master accounts.
Curiously, tho, the Fed let Adyen open its Fed master account in July 2020 (screenshot ^), but the Fed didn't approve Adyen's US branch until May 2021. Folks--that's..."interesting." federalreserve.gov/newsevents/pre…
1/ BIG NEWS for #fintech! A sixth US state--Idaho--is willing to charter uninsured, non-lending, 100% reserve banks that are eligible for Fed master accounts (the other states are CT, ME, NE, VT & WY). This trend could turn the "bank-as-a-service" (#BaaS) model on its head!!!!!
2/ The revelation was buried deep in the Fed's master account database (which Congress had to force the Fed to release--which it did late on a Friday afternoon before the Juneteenth 3-day weekend. Hoping no one would see it???) It's a #GiftThatKeepsGiving. federalreserve.gov/paymentsystems…
3/ Here's a recent blog post I wrote about the power of U.S. state to charter banks & federal law requiring federal bank regulators to respect the chartering decisions of the bank chartering authorities, which do the weeding out.
https://t.co/dEpudBsrYBcaitlin-long.com/why-defending-…
TWEET 🧵on state-chartered trust companies, #PrimeTrust & whether customer funds are really theirs amid a failure. I responded to the below tweet from @mikebelshe but the thread was cut up, so I'm re-posting here in whole. First, Mike's tweet & then my 11-tweet response in whole:
Mike's tweet here, asserting "it's the client's money" and "will you stop pushing the bullshit that WY is somehow special?"--@mikebelshe
1/ Mike, you're wrong. #Wyoming law is different & more customer-friendly, but let's start with your assertion that "it's clients' money." Two facts make clear that's not the case here, & then I'll discuss the failure of a state-chartered trust company where customers took a hit
1/ WOW--PRIME TRUST RECEIVERSHIP WILL BE A MESS & it's *EXACTLY* what the State of #Wyoming enacted its laws to avoid. Big ?s:
*who will pay the legal bills--NV taxpayers or #PrimeTrust customers??
*some PrimeTrust customers are IRAs/ERISA plans--can these even be bailed in??
2/ Avoiding this situation is *EXACTLY* why #Wyoming set up special-purpose banks to service digital assets. Things Wyoming did but Nevada didn't:
*require SPDI banks to pre-fund receivership costs w/ regulatory capital
*clarified its UCC
*uses banks, not non-banks. Why? 👇
3/ Why did #Wyoming choose banks, not non-banks, to service digital assets?
* bank laws protect customers better (asset segregation by statute, not by contract)
* financial disclosure (banks file "call reports")
* banks can't be debtors in US bankruptcy ()law.cornell.edu/uscode/text/11…