
Big European states call for cryptocurrency curbs to protect consumers - T-A
https://www.reuters.com/article/us-eu-economy-cryptoassets/european-countries-call-for-eu-stablecoin-regulation-idUSKBN26219G
======
donatj
> The five countries want all stablecoins to be pledged at a ratio of 1:1 with
> fiat currency, with reserve assets denominated in the euro or other
> currencies of EU members states, and deposited in an EU-approved institution

So either backed in whole is fine, and not backed at all is fine? But not
partially backed? No room for a middle ground? Seems silly, and mindless.

Yet banks, whose _entire business_ is partially backed fiat money are kosher?
Almost seems like bias towards old businesses. I have nothing against banks
but this smells kinda like big-bank flexing it’s muscles to push out
competition.

~~~
londons_explore
Banks (and their customers) get government protection in return for following
a very extensive set of restrictions about how they can run their business.

~~~
donatj
But why is there no room for middle ground? If I’m personally fine with the
risk/reward balance of non-protected partially backed finance, why is it not
acceptable?

~~~
kasperni
Lots of people are fine with the risk/reward balance of using recreational
drugs, driving without a seatbelt, working as a sex worker, and tons of other
things. And somehow that's not acceptable.

~~~
donatj
Two of the three on that list are legal in at least one of the countries
involved.

Moreover potential major bodily harm versus potential loss of savings don’t
seem directly comparable.

~~~
kasperni
From the stories I've read about people losing their entire life savings. It
sounds as it is a deeply traumatic event. Which ranks up there with bodily
harm, losing relatives, ect. And one which often has a permanent effect on the
reminder of their life.

------
cribbles
This article focuses heavily on Facebook’s Libra, which to my knowledge has
recently scaled back from offering a currency balanced by (and collateralized
against) a basket of commodities to offering a handful of 1-to-1 fiat-anchored
stablecoins.[1] This is way less technically ambitious, and seems pretty
similar to the old Facebook Credits system of in-app purchases.

Where this gets interesting for me is 1) stablecoins like DAI, which
collateralize using other cryptocurrencies, 2) projects like Celo, which are
doing something similar to Libra but with way less initial runway for backing
EU-sanctioned reserves, and 3) projects like Reserve Protocol, which aim for
something similar to Libra’s original goal (achieving “stability” relative to
an algorithmic balance between the real value of currencies, goods, etc).

From the article it’s not obvious to me whether a lot of this could be evaded
simply by not marketing your project as a stablecoin.

[1] [https://fortune.com/2020/04/16/facebook-libra-multiple-
singl...](https://fortune.com/2020/04/16/facebook-libra-multiple-single-
currency-coins/)

~~~
jillesvangurp
The problem blockchain companies have is that at some level they need to
interact with the traditional financial system to make money. That means
dealing with legal entities in various states and dealing with lots of pesky
regulations that those states have around investing and transacting.

Basically, in most civilized places, if you want to be a bank there are some
rules to be taken into account. That's why stablecoins are so hard to do
because as soon as you start transacting, you are exposed to those rules
because you basically become a bank like entity. So, authorities wake up and
start paying attention as soon as you do that.

The projects you name are interesting because they are all based in the US and
are being built with good old investor cash raised from the usual suspects
(i.e. VCs). So, they have share holders and are operating under US law.
Basically all three are really talking about building similar things but as an
outsider you have to wonder who wins if their token business is successful:
the share holders or the token holders?

There's a bit of friction here between the marketing on one hand projecting
some kind of utopian decentralized thing and the obvious desire of the
investors to turn this thing into a very centralized money funnel straight
into their pockets. The reality is of course that these are companies and not
charities and the reason investments are so high is that they are looking to
tap into significant streams of cash. Just like banks.

------
louwrentius
I don't see any real purpuse for cryptocurrencies that benefits the greater
good, to be frank.

[https://louwrentius.com/cryptocurrencies-are-detrimental-
to-...](https://louwrentius.com/cryptocurrencies-are-detrimental-to-
society.html)

I wish that smart people involved with this kind of technology would spend
their time on something more relevant / important.

~~~
jokethrowaway
Proof of Work is not the only way to do cryptocurrency and there are less
wasteful distributed ways of doing cryptocurrency.

Cryptocurrency has a useful purpose: freeing people from government and the
choices that government impose on people.

Your government doesn't want you to buy weed? You can buy it with
cryptocurrency from an online market instead of doing a shady deal in a dark
alley, with a higher risk to be scammed.

Your government is filling the economy with bubbles through quantitative
easing and "stimuli" or by printing money? You can move part of the economy to
cryptocurrency.

Your government is stealing 50% of your income under threat of violence? Some
cryptocurrency can be made harder to track and can be a useful tool to fight
government aggression.

I doubt cryptocurrency will get us anywhere because the government can just
ban cryptocurrency at any time, but there is a clear purpose.

------
chroem-
I'll never understand protecting the middle class from "dangerous
investments", but continuing to allow state-sponsored lotteries which are
demonstrably scams.

~~~
toyg
They are not scams, they are “funny taxes”: people pay extra tax and have some
fun doing it.

Modern fiscal politics, from VAT onwards, is all about trying to tax the poor
without them noticing.

~~~
Normille
>They are not scams, they are “funny taxes”

Or, as the cynics over here refer to it "The Stupid Tax".

The odds of winning £1million on the UK National lottery are 14,000,000-1. If
you really want to maximise your chances of winning £1million, go down your
local friendly bookies and see if you can find 1,000,000-1 odds being offered
on any stupendously unlikely event and put your money on that. Your bet is 14
times as likely to come up as your lottery ticket is.

------
sam_lowry_
It would be wiser if they did it in an effort to protect the environment.

------
simion314
I apologize if off-topic, if you are in EU have you used bitcoin to buy things
and if yes anything else except computer parts? I just did a search for my
country Romania and I only found a small list of shops(it could be outdated),
PayPal was not that popular here either (maybe it changed) but I could not use
PayPal on the biggest store emag.ro

~~~
xiphias2
I was able to get whole genome sequencing from DanteLabs anonymously with
Bitcoin (I'm still waiting for the test results though). Also cheapair.com
works well for plane tickets, though it's the opposite of cheap.

~~~
Symbiote
Is there much point to anonymity when you give someone your DNA to sequence?
You have to completely trust they will delete all records and samples,
otherwise they can link you to relatives who haven't paid anonymously.

~~~
xiphias2
If you're a serial killer I would highly recommend against taking any kind of
DNA sequencing. But in the US many people with rare diseases are afraid of
losing their medical insurance, and paying with Bitcoin is a specific request
from them. As for me I don't care about insurance at all, I just don't trust
the banking system enough to keep my money with any bank (except the Norwegian
thin bank that has a 1:1 reserve ratio, but I don't have the minimal amount of
$10M to have an account with them).

~~~
simion314
> I just don't trust the banking system enough to keep my money with any bank

I don't trust banks that much either but it is the less risky thing
considering my in existing skill at financial stuff(I did not consider
bitcoins or stock market because it feels like gambling with my or my son
future, and I think I am risk adverse)

~~~
xiphias2
Both the stock market and housing market correlates inversely with the
interest rates, so actually buying stocks doesn't give you any
diversification, but if you're afraid of buying Bitcoin, you could just buy
some gold as an alternative store of value. Another option is to just put 1-4%
of your portfolio into Bitcoin, which still is a great hedge against the
current financial system, and actually decreases the volatility of your
current portfolio (if you have a house right now). Having your money in fiat
currencies is just giving 10% of it away to your current leaders.

