Here's one way to think about what I started calling the "Washington - Wall Street Industrial Complex" since before crypto:
Fact: Banking, in America and other countries, is a "protected" industry. It's protected via difficult chartering processes, expensive regulations, and massive bailouts. It's the only industry where regulators have a mandate to make sure it remains profitable.
And it's among the few where the government makes sure citizens get inferior products at higher costs to protect industry profits (e.g., the ban on interest payments from FinTechs & stablecoin issuers).
Fact: Banking, in America and other countries, is a workaround to building a surveillance state and violating individual liberties otherwise protected by law (in America's case, protected within the most important part of the foundational document, the bill of rights).
The alphabet soup of "compliance:" programs like AML, KYC, CFT, Sanctions etc gives the government extra-legal tools to surveil, censor, and oppress.
As Commisioner @HesterPeirce pointed out yesterday in her must-read speech, this workaround is enabled by a third-party doctrine where many of our rights (like the 4th amendment) don't apply if we "voluntarily" disclose personal information to a third party, like a bank.
But a lot of that disclosure isn't voluntary. Neither is the debanking that the crypto industry (and other non-favored industries or marginalized groups) have experienced over the years.
The government can't just willy nilly surveil or discriminate against companies it doesn't like without due process, but banks can, and do. They are encouraged to.
Fact: The supposed reason why the alphabet soup exists, to prevent illicit activity, is a canard. None of it actually works.
I know this because I've had very frank conversations with senior people in government enforcement of the soup and senior bank execs in charge of enforcing it. They all agree on only catching "the tip of the iceberg".
We know this because trillions get laundered through the banking system annually. Every year some big bank gets slapped with a billion-dollar fine and nobody bats an eye. Surveys show the vast majority of bank-execs treat AML fines as "just the cost of doing business."
One way to identify a failed regime, or just a bad law, is when most people subject to it just break the rules and pay the fine.
Another is to identify simple flaws in logic of how it's implemented, like the fact that the thresholds for reporting are not inflation adjusted.
Conclusion: When you combine these facts, it becomes apparent that the way banks are treated by the government has less to do with protecting people and more to do with exposing them--to surveillance and overreach.
Crypto fixes this complex. Or at least exposes it for being flawed and disingenuous.
Fun supporting evidence: Jamie Dimon, Elizabeth Warren, and countless other no-coiner academics & columnists don't agree on much, but they all agree that on perpetuating the Complex.
When the bedfellows are strange, the motivation is suspect.
Fact: Banking, in America and other countries, is a "protected" industry. It's protected via difficult chartering processes, expensive regulations, and massive bailouts. It's the only industry where regulators have a mandate to make sure it remains profitable.
And it's among the few where the government makes sure citizens get inferior products at higher costs to protect industry profits (e.g., the ban on interest payments from FinTechs & stablecoin issuers).
Fact: Banking, in America and other countries, is a workaround to building a surveillance state and violating individual liberties otherwise protected by law (in America's case, protected within the most important part of the foundational document, the bill of rights).
The alphabet soup of "compliance:" programs like AML, KYC, CFT, Sanctions etc gives the government extra-legal tools to surveil, censor, and oppress.
As Commisioner @HesterPeirce pointed out yesterday in her must-read speech, this workaround is enabled by a third-party doctrine where many of our rights (like the 4th amendment) don't apply if we "voluntarily" disclose personal information to a third party, like a bank.
But a lot of that disclosure isn't voluntary. Neither is the debanking that the crypto industry (and other non-favored industries or marginalized groups) have experienced over the years.
The government can't just willy nilly surveil or discriminate against companies it doesn't like without due process, but banks can, and do. They are encouraged to.
Fact: The supposed reason why the alphabet soup exists, to prevent illicit activity, is a canard. None of it actually works.
I know this because I've had very frank conversations with senior people in government enforcement of the soup and senior bank execs in charge of enforcing it. They all agree on only catching "the tip of the iceberg".
We know this because trillions get laundered through the banking system annually. Every year some big bank gets slapped with a billion-dollar fine and nobody bats an eye. Surveys show the vast majority of bank-execs treat AML fines as "just the cost of doing business."
One way to identify a failed regime, or just a bad law, is when most people subject to it just break the rules and pay the fine.
Another is to identify simple flaws in logic of how it's implemented, like the fact that the thresholds for reporting are not inflation adjusted.
Conclusion: When you combine these facts, it becomes apparent that the way banks are treated by the government has less to do with protecting people and more to do with exposing them--to surveillance and overreach.
Crypto fixes this complex. Or at least exposes it for being flawed and disingenuous.
Fun supporting evidence: Jamie Dimon, Elizabeth Warren, and countless other no-coiner academics & columnists don't agree on much, but they all agree that on perpetuating the Complex.
When the bedfellows are strange, the motivation is suspect.
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