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Caitlin Long 🔑⚡️🟠 Profile picture
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Sep 24 • 7 tweets • 5 min read
1/ WOW--pageviews on this kinda viral. Thanks all!🙏 2 reactions to comments:
A) ppl seem surprised that I'm talking abt #bitcoin as pymt tech, not as an asset. Not new. I've always said price is the LEAST interesting aspect of #BTC + been critical of its leveraged financializers
2/ Leverage-based financializers & esp criminals & fraudsters set the industry back + manipulated secondary market price (#bitcoin became #WallSt's latest plaything🤮). "Play stupid games win stupid prizes" as saying goes. Hope everyone learns. Innocents: sorry for your losses.
3/ More interesting=those asking me "why warn the banks?" 3 things: on/off ramps btwn USD & #BTC still matter (there aren't many & they're at some risk of regulatory crackdown); banks aren't going away as fee-based service providers/safeguarders of property; & we're not ready yet
4/ The latter is key & best explained by analogy. Look at what's happening to countries pushing too much renewable energy too soon. Problem: renewables aren't yet sufficiently scaled. Same problem w/ #bitcoin/#LightningNetwork. It's happening but we have more scaling work to do.
5/ It's coming tho. Just look at who's already all-in on #LightningNetwork (eg, @jack--who has proven his ability to deliver financial products that run circles around those of legacy banks at @Square, as just one example).
6/ Last thought: do you think that, if I believed #hyperbitcoinization would happen tomorrow, I would be spending time building a new breed of bank? 🤔 @custodiabank is a "dada-bank" (like "databank" a dollar-and-digital-asset bank, which bridges the two in a safe & sound manner)
7/ No one can predict the future perfectly, but we can see megatrends coming. IMHO it's pretty clear that #Bitcoin as internet-native payment protocol is going to "tip" as it scales w/ #LightningNetwork. Whether banks get left behind is a question whose answer isn't yet known.

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More from @CaitlinLong_

Caitlin Long 🔑⚡️🟠 Profile picture
Sep 4
@GeorgeSelgin @DanAwrey @KleeBeard @dandolfa @amacker @Aarondklein @DavidBeckworth @vtg2 @EconSteveM @jasonfurman @RebelEconProf @ProfJulieHill @jameswester @jp_koning @ProfKateJudge @dgwbirch @JosephPolitano @TheStalwart 1/ George--may I throw another critical topic into this great discussion? An even bigger factor in payment systems is integration cost. The issue of volume pricing discounts won't matter if any system is too expensive for users to integrate with upfront.
@GeorgeSelgin @DanAwrey @KleeBeard @dandolfa @amacker @Aarondklein @DavidBeckworth @vtg2 @EconSteveM @jasonfurman @RebelEconProf @ProfJulieHill @jameswester @jp_koning @ProfKateJudge @dgwbirch @JosephPolitano @TheStalwart 2/ The US banking industry has a long history of building walled gardens--proprietary systems that require big upfront integration costs. #fintech generally has the opposite approach--they build systems as open & interoperable as possible, based on ease of tech integration
@GeorgeSelgin @DanAwrey @KleeBeard @dandolfa @amacker @Aarondklein @DavidBeckworth @vtg2 @EconSteveM @jasonfurman @RebelEconProf @ProfJulieHill @jameswester @jp_koning @ProfKateJudge @dgwbirch @JosephPolitano @TheStalwart 3/ Think Stripe's infamous API (7 lines of code). Why has Stripe been so successful? Ease of integration is a big reason. Would the Stripes of the world exist if banks made integrations easier? Prob no (h/t @kanzure). Much of #fintech is really middleware to solve this problem.
Read 10 tweets
Caitlin Long 🔑⚡️🟠 Profile picture
Jul 5
1/ OK, so since my rural/urban life history seemed to fascinate y’all, here’s a bit more. This weekend I learned abt my great, great, great grandfather, who was a pioneer settlor of Johnson County, Iowa. Wolfgang Rohret immigrated from Bavaria w/ his family via Baltimore in 1840.
2/ Wolfgang Rohret was drafted to fight for Napoleon at age 15 & was one of the *FEW* survivors of Napoleon’s ill-fated invasion of Russia in 1812, known as “one of the most lethal military operations in world history” (>90% died). He immigrated to the US in 1840 w/ his family.
3/ His son, my great great grandfather, Peter Rohret, was 11 when the family immigrated to Iowa from Bavaria. The sons were skilled at construction & helped build the Iowa territorial capitol building (now on Univ of Iowa campus). They also built these cabins, now in City Park
Read 5 tweets
Caitlin Long 🔑⚡️🟠 Profile picture
Jul 2
1/ I'VE BEEN THINKING MORE abt the #bitcoin ETF. For yrs, I've said ETFs are a double-edged sword for bitcoin (bc ETF mkt makers are permitted by law to create more claims to the underlying asset than the quantity of the underlying, which distorts the price of the underlying).
2/ But, as I wrote in @Newsweek this week, the SEC's decisions to reject spot #bitcoin ETFs don't exist in a vacuum. They must be viewed in context of the SEC's decisions in 2015 to approve 1 (& only 1) fund structure for bitcoin--& not another until 2021.
newsweek.com/crypto-crash-w…
3/ The decisions from 2015-21 + the inherent structure of closed-end funds (which can trade at very different prices than their underlying asset) created a massive market distortion, as detailed in my @Newsweek post. That market distortion brought in the fast-money #WallSt crowd.
Read 13 tweets
Caitlin Long 🔑⚡️🟠 Profile picture
Jun 19
1/ I’VE BEEN THINKING, while doing yard work, abt the #crypto crash & Fathers’ Day. They both relate to one of the biggest lessons my late dad taught me, which came from my grandpa (an 8th grade educated Iowa farmer who had a PhD in common sense). He scoffed at “paper wealth.”
2/ For context, my dad—his oldest child—was born just days after the 1929 stock mkt crash. Grandpa watched as some neighbors, who had leveraged their farms to play the roaring ‘20s stock mkt, lost them in the crash. Grandpa died before I was born but Dad passed his wisdom to me.
3/ That paternal nugget of common sense influenced my studies of finance & economics in school, in work, in reading history & in my journey of studying the whole range of economic schools of thought after the 2008 financial crisis. Applying it to today, what Grandpa observed…
Read 7 tweets
Caitlin Long 🔑⚡️🟠 Profile picture
May 17
1/ NEW ARTICLE abt why USD-collateralized #stablecoins shld be backed 100% by cash deposited at Fed. Even T-bills don't work--bc they settle next day, but last wk a stablecoin collapsed w/in hours. Need *real-time* liquidity (only avail at Fed).@RiskDotNet
risk.net/comment/794869…
2/ This is another in a long collaboration w/ Dr. Manmohan Singh of @IMFNews about financial sector plumbing. He has taught me so much over past decade.

Sum:
* D.C. policymakers are moving away from view that #stablecoins should be issued only by insured depository institutions
3/ That's good IMHO bc deposit insurance funds should be insulated from crypto--bc settlement differences are too big (could trigger runs on banks at financial system core). Policymakers r moving toward ring-fencing the risk as they should IMHO

* Next ?=back w/ T-bills or cash? Image
Read 8 tweets
Caitlin Long 🔑⚡️🟠 Profile picture
Apr 8
1/ REMARKABLE SPEECH by US federal bank regulator abt #stablecoins (even cites yours truly at footnote 20). He discusses potential special-purpose, ring-fenced, non-lending banks as stablecoin issuers--ie, what #Wyoming SPDIs are. + nods to state efforts.
occ.gov/news-issuances…
2/ This feels like the moment when another national group (the ULC), which had initially been critical of #Wyoming jumping ahead to recognize digital assets in its commercial laws, started to replicate some of Wyoming's good ideas. The ULC later saluted Wyoming as a pioneer. 🙏🤠
3/ While I wouldn't ever expect the federal bank regulator to salute #Wyoming as pioneer here (there's a long history of fighting between the federal & state bank regulators), the nod he gives to the **IDEAS** is remarkable.

Here are snippets from OCC Acting Commissioner Hsu:
Read 8 tweets

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