As some of you might be aware, the Financial Conduct Authority proposed a regulation to place a ban on crypto derivatives, which came into effect during the first week of January 2021.
What this means is that investors can no longer hold Bitcoin (BTC) Funds or Trusts in a Pension plan or in an ISA, which is in effect a curtailing of people's ability to build or even to safeguard their personal wealth and freedom.
Yet, this ban is being justified under the banner of 'defending UK investors' money. How laughable that Regulators consider BTC's underlying assets 'unworthy of trust, and the Bitcoin derivatives market to be 'illicit, abusive" and prone to financial crime'. Does that ring a bell with regard to the utility of our own fiat currency?
Listen, I am neither for nor against the BTC derivatives market, however, pot/kettle springs to mind!
In yet another huge headline reported by the Times, a proposed regulation on British Bitcoin investors may mean they will no longer be permitted to deposit their crypto profits into their UK bank accounts.
Should this new restrictive measure for BTC and other cryptocurrencies come into force, needless to say, investors holding these assets will experience issues cashing in their gains and banking their profits; bearing in mind, that the ban would impact the accounts where the funds initially originated from (albeit funds have now grown some). This is nothing short of punitive enforcement and begs the question, - why then do you need a bank?
It would seem that the war on Bitcoin, cryptocurrencies and more importantly, our personal freedom is heating up! But could banks be shoring up problems for their very survival further down the line!
The article also cited HSBC Bank. There has been in general a lukewarm approach by banks toward cryptos in general, not to mention inconsistencies in their policies as to whether they will or will not accommodate the varying needs of crypto investors. As such bank cooperativeness level has differed from one to the other.
Adopting the moral high ground with such a draconian policy, under the pretext that it for the protection of (supposedly un-educated) crypto investors does not wash. Consider this, many banks are in the process of, or are considering developing their own digital currencies - this includes many Central Banks globally, looking to roll out their own version of (CBDC's). Why?
If investors' funds have to remain on cryptocurrency exchanges either in fiat or in cryptocurrency form, will investors not simply leave their gains on the said exchange and convert their cryptos into stable coins for example, for which they can earn a far higher rate of interest? This would certainly prove a better option than having to rely on the paltry offerings or even negative interest rates offered by most banks' on saving accounts.
Could banks really survive with losing out on the humongous interest rates they charge for lending out our savings while paying us pennies or, as has often been the case, charging us (negative interest rates) for the privilege of lending out our savings? Fear, not fellow Cryptonians. Remember this! Whatever opportunities exist in our offline world are also coming into existence in the online, decentralised blockchain world.
Should banks decide to go down this slippery path and refuse to process deposits from crypto gains, savvy investors will always find ingenious ways to achieve their objectives and this could potentially hurt not only the banks but the various investment vehicles so many people have come to rely on to fund their retirement or to build a nest egg.
People will simply turn to trustless, secure means and divert their investments where they personally believe they can grow and protect their personal wealth and their freedom. The most promising sectors right now where investors can do just that are in cryptos, gold and silver. As one observer noted, "many banks will put themselves out of business because of it".
In a further recent move, in the US, Financial Crimes Enforcement Network (FinCEN), put forward new regulations against Bitcoin (BTC) by specifically targeting self-hosted wallets of crypto investors: meaning that investors will not be able to withdraw or send their cryptos from their hardware or self-custody wallets to exchanges without having to undergo( KYC) - know your customer and having to inform the exchange as to the exact details pertaining to their personal wallets.
This raises a number of issues, firstly, cryptocurrency exchanges will have the monumental task of additional KYC on investors, many of whom will likely hold multiple wallets. Additionally, how are US Regulators to effectively police such a proposal.
Secondly, these proposals by regulators presumably, might necessitate exchanges having to collect even more personal and identifiable data on investors and their personal wallet activities. As we know, exchanges are a prime target for hacks.
This then becomes even more of a security issue that should cause great concern as to who will be responsible for managing crypto investors' sensitive data, how securely will this data be stored and for how long. Do not be fooled that specific US Regulation does not affect people in the UK. As we all know, the US is usually the front-runner with the UK as always, not far behind.
Regulations In the US have also come down on Privacy coins to prevent people from using them to shield their gains. Last year, Monero (XMR) had a bounty offered by the IRS for anyone who could crack the privacy coin's code. Zcash (ZEC) chose to get wrapped in centralisation and Dash has toed a similar line and is the new darling of control.
Privacy coins or freedom coins as I like to call them are having to go against the very grain by which they came into existence in the first place. Threats posed by crypto regulations are seeing these coins come face-to-face, so to speak, with a
'do or die' scenario. Privacy coins are having to succumb to the pressure of conforming to centralisation as set out by regulators or, face being dropped by the top crypto exchanges on which their listings and ultimately their success depends. Here is an extremely strong sentiment expressed by Heide:
"For those of you who are concerned that more cryptocurrencies will choose to "go soft" and abandon their core values in an effort to essentially bow down to the very pressures they were created to stand up against... you'll learn time and again that there is at least one steadfast cornerstone to this cryptocurrency world that revolves around decentralization; add to that blockchain interoperability and we've got ourselves a recipe for financial freedom and true autonomy".
Stay the course and remember the gift we have been bequeathed of a truly decentralised cryptocurrency for the people - Bitcoin, and all those that followed
in its wake!
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