Elon Musk, Living Legend
Time Magazine has named Elon Musk Person of the Year for 2021. Elon is one of the most important entrepreneurs of our generation, turning our sci-fi fantasies into reality. He was quoted as being able to “make great decisions under extraordinary pressure” with a “never-ending drive to change the course of humanity.”
His current titles include:
Founder, CEO and Chief Engineer of SpaceX
CEO and product architect of Tesla, Inc.
Founder of The Boring Company
Co-founder of Neuralink
Co-founder of OpenAI
To lead any one of these companies would be impressive, but somehow he manages to juggle them all, while achieving astounding success. The Time article illustrate these successes eloquently:
“He tosses satellites into orbit and harnesses the sun; he drives a car he created that uses no gas and barely needs a driver. With a flick of his finger, the stock market soars or swoons. … He dreams of Mars as he bestrides Earth, square-jawed and indomitable.
His startup rocket company, SpaceX, has leapfrogged Boeing and others to own America’s spacefaring future. His car company, Tesla, controls two-thirds of the multibillion-dollar electric-vehicle market it pioneered and is valued at a cool $1 trillion. That has made Musk, with a net worth of more than $250 billion, the richest private citizen in history, at least on paper. He’s a player in robots and solar, cryptocurrency and climate, brain-computer implants to stave off the menace of artificial intelligence and underground tunnels to move people and freight at super speeds.”
Elon, time and time again, has been dismissed in his career as a charlatan, and not taken seriously. One time, rocket engineer, Jim Cantrell, and former NASA administrator, Mike Griffin, were traveling with Elon, trying to buy a rocket. Mike says: “What do you think the idiot savant’s doing up there?”, loud enough for everyone to hear. Cantrell recalls:
“Elon’s sitting in the row ahead of us. And he turns around and says, ‘Hey guys, I think we can build this rocket ourselves. I’ve got a spreadsheet.’ We start looking at the spreadsheet, like, ‘Elon, where did you get this?’ I still use something similar to model a rocket today. He’d just gone and figured it out.”
Elon has continued to prove people wrong, and establish himself to be a brilliant engineer.
He’s taken incredible risks in his careers, and pushed the envelope forward in innovating many sectors. On top of that, he’s a self-proclaimed Edge-Lord and S***poster, whose disregard for corporate-media approval is refreshing.
And he’s even interested in cryptocurrency.
Congratulations, Elon, for being an inspiration for how much a single person can achieve. Of course, an award given out by Time magazine is the very least of your achievements.
Out of the Shadows, A Stablecoin Appears
Tether (USDT) is now the official adopted currency of The National Unity Government (NUG) of Myanmar. The NUG is the unrecognized shadow government led by the elected State Counsellor and Nobel Peace Prize Winner Aung San Suu Kyi, who was overthrown in a coup d’etat before she could take office. It stands in opposition to the military junta that is officially in power. Myanmar, (formerly known as Burma) has a history wrought with civil war dating back to the 1940s. The NUG has decided to operate in its own financial independence by adopting Tether, a stablecoin attached to the value of the US Dollar. This is a momentous and prime example of how alternatives to government-controlled fiat can be a tremendous tool for those in real need - such as those struggling for democracy in Myanmar. Tether responded to the action in their official blog post saying:
“The significance of this moment goes far beyond the potentials of cryptocurrency to provide financial security but points to long-standing confidence in the US dollar for those who do not have confidence in their own governments or national currencies”.
While centralized stablecoins are more easily controlled than a decentralized cryptocurrency, it’s great that countries now have options they can easily tap into if blocked out of traditional financial rails.
Elizabeth Warren “Just Says No” to Stablecoins
Elizabeth Warren is on a rampage against stablecoins and DeFi.
The Senate Committee on Banking, Housing, and Urban Affairs hearing provided an opportunity for Warren to attack DeFi, a place where “scammers, cheats, and swindlers meet innocent investors and traders.” She remarked that in the DeFi world, “someone can’t even tell if they are dealing with a terrorist.”
But Warren misses the point that DeFi isn’t an unregulated space, it’s just not government that’s doing the regulating. It’s a self-regulating world where transparent ledgers allow people to see exactly how much collateral someone has and how much interest they’re paying. It’s a world where individuals can decide on their own risk parameters. The open and permissionless nature of DeFi is something that those used the opaque world of traditional finance can’t comprehend.
Warren also tied DeFi back to stablecoins in the hearing, calling them the “lifeblood” of DeFi, and urging swift action to clamp down and regulate their usage. Centralized stablecoins represent the easiest part of the DeFi world to regulate, so it makes sense that this is what regulators would target next.
Warren said that a big reason stablecoins are dangerous is because they’re acting like the US dollar, but not necessarily fully backed by the US dollar. In Tether’s case, she says it only has “10% reserves” backing it. But she is only factoring in cash reserves, while Tether also has a large treasury of money market investments.
While it is a good idea to scrutinize Tether’s reserves, because it’s important for consumers to understand the risks they take when investing, Warren should be scrutinizing the traditional banking system just as thoroughly.
On March 15, 2020, the Federal Reserve Board announced that reserve requirements for all depository institutions was now 0%, effective as of March 26.
That’s right. In the “regulated” world of finance, banks are currently required to have 0% reserves on hand.
In practice, bank reserves are currently far from zero, but there are major inconsistencies with how traditional finance and the crypto world are dealt by politicians.
DeFi is considered by Warren to be just a scammy underbelly of the crypto world. It’s also a vibrant ecosystem where participants are able to earn interest by staking their money, or take out loans without unnecessary middlemen. It’s enabling a huge swath of the population to participate in global commerce in a way that has been previously denied to them. People have the right to make their own financial choices, and DeFi is enabling that choice. We just hope that those who choose to take control of their own assets are doing so responsibly, knowing that in this world they are responsible for the consequences of their actions.
Crypto Mom is Not Mad, Just Disappointed
SEC Commissioner Hester Peirce, (colloquially known as “Crypto Mom”) has expressed her disappointment with Gary Gensler’s newly released regulatory agenda.
In an open letter on the official SEC.gov website, she co-wrote with SEC Commissioner Elad L. Roisman:
“While Chair Gary Gensler’s newly released regulatory agenda is ambitious in scope, we are disappointed with its content. It fails to include any items intended to facilitate capital formation and misses opportunities to foster fair, orderly, and efficient markets and further investor protection. Instead the agenda is brimming with plans to redo recently completed rules, add new regulatory obligations, and constrain investor choice.”
She mentioned many increased burdens placed on small businesses when raising capital. An example of these burdens is that Form-D, used to file a notice of an exempt offering of securities with the SEC, will now apply to small businesses. Current Federal law exempts non-public offerings from having to register because Congress has previously acknowledged that certain offerings do not require disclosure to the public or to the SEC. Peirce wrote:
“Smaller and younger companies often have legitimate business reasons to be discreet about early capital raising efforts. Investors in private companies already receive more information than is included on Form D. While it might be helpful for the SEC to have more information about these offerings, it is odd to consider imposing new requirements on small businesses which are trying to survive in a time of great uncertainty caused by COVID-19, labor shortages, supply chain disruptions, and inflation.”
She also takes aim at the lack of regulatory clarity around crypto.
“In the last several years, this sector has grown in size, complexity, diversity, and investor interest. Rather than taking on the difficult task of formulating rules to allow investors and regulated entities to interact with digital assets, including digital asset securities, the Agenda—through its silence on crypto—signals that the market can expect continued questions around the application of our securities laws to this area of increasing investor interest. Such silence emboldens fraudsters and hinders conscientious participants who want to comply with the law.”
Peirce tweeted in summary:
“The latest regulatory agenda shows that the SEC will be busy in the upcoming months, but it won't be working on the right things.”
In a world of increasing government obstacles placed in the way of blockchain innovation, it sure feels good to have Mom on our side. Can she be the SEC Chair please?
The SUN Never Sets on the Crypto Empire
“It is a true honor to serve as the WTO ambassador for Grenada. I look forward to the opportunity to represent Grenada and work with WTO leadership to reinvigorate global trade in various ways, particularly the development of a robust digital economy internationally.”
Founded in 2017, the TRON Foundation raised over $70 million through its initial coin offering before digital tokens were outlawed in China. According to his official spokesperson, Justin’s new venture, which is unpaid, is fueled by his goal to “represent and make blockchain mainstream by bringing it to the global political arena via [the] WTO”.
“My career in the future … will focus on the legitimization of blockchain technology on a nation-state level.”
Part of that legitimization process includes pushing back on the USA’s stranglehold on world crypto regulation. Through such organizations as FATF and the World Bank, the US exerts a tremendous amount of control over the policies of other sovereign nations. They regularly demonstrate their control, such as when they went after the exchange BitMex: Despite BitMex not being based in the USA, and despite them banning IP addresses from US residents, the US was somehow able to justify arresting its founders for not complying with US laws.
Sun’s new focus on helping countries other than the US adopt and embrace crypto comes after watching the U.S. House Financial Services Committee hearing this week. Sun said that the industry cannot make an all-in bet on the US, given the country’s slow progress and conservative view on crypto’s legalization.
“We cannot fully rely on the U.S. market. … There are nearly 8 billion people in the world and the U.S. only has just 300 million people. The U.S. market should not decide [on crypto] with more than 7 billion people left in the rest of the world.”
If Sun wants to help make a dent in this US crypto regulation stranglehold, best of luck to him!
By Will Sandoval, NBTV Associate Producer, and Naomi Brockwell.
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