Oh hell no. I'd rather let crypto collapse, take the banks down with them, and bail out the banks again, than enable the creation of a second parallel class of wealth-extracting, economy-manipulating parasites.
Anyone speculating in crypto shouldn't get backstop by government. Wasn't the whole DeFi argument that fiat/government could be bypassed?
Most who are getting fucked by this fiasco are retail who have never touched DeFi.
https://www.federalreservehistory.org/essays/emergency-banki...
Title 2 above seems to describe a government appointed regulator in case of failure.
Receivership is different from nationalisation. It’s aimed at winding down or disposing of the asset on a short timeline. For comparison, we’re FTX in receivership, its assets would be controlled by a third party whose job would be to protect it for users’ benefit.
We can quibble about fiat/currency vs banking, but technically the government owns all money.
Granted, retail and last-mile banking seems a poor fit for government control.
Although from memory Japan offers retail banking services through their postal service? (for historical quirk reasons, see: https://en.m.wikipedia.org/wiki/Japan_Post_Bank )
But if you feel there’s no difference between stocks (an enforceable legal claim on the real property and intellectual property of an on going enterprise), housing (real property) and crypto (nothing, literally nothing) then there’s no point in discussing it.
Crypto is cauterised. There were inklings of institutionalisation, but the Fed raised rates before that took hold. This means the people and wealth in crypto can vanish without compromising much else, a statement I cannot make about most industries or assets.
I would also venture that most people suggesting we not backstop crypto were also opposed to bailing out banks. But unlike with banks or housing, there is no broader interest in crypto.
Which means, errors get caught before compounding too much. It also means knowing that no decision is made with the greater good or lining my pockets mantra solely. It is a combination of both.
(Apologies if this is a dumb question. I don't follow crypto news very closely.)
There was a big lobbying push to fool representatives into making the ponzi circus legit.
But then FTX suddenly disappeared below the waves, so I think that's on hold right now.
I don't have any sources that I trust at hand, but a quick Google search shows aggregated data about investment banks and the assets they hold on the crypto economy: https://www.blockdata.tech/blog/general/top-banks-investing-...
For better or for worse, it doesn't seem big enough of an investment to actually bring down traditional banking.
But for real. Why not nationalize the failed institutions? It's not as if the incentives can get more perverse than they are now, unless I'm missing something.
(Not even /s, that's the actual argument people make)
For example, anyone who is in favor of "smaller government" should support of the "Defund the police" movement. They do not. That should tell you something about the state of critical thinking.
Public healthcare is "communism" but police and the armed forces are somehow not. I've made literally the same argument to someone on here a while back. Here it is: https://news.ycombinator.com/item?id=25503815
FWIW the UK and Canada (and maybe other Commonwealth countries) have had successful examples of public-owned companies. The US has no such tradition and is, therefore, culturally resistant to the idea.
EThe Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Referenced The Times article: https://archive.ph/FqRF3
Bonus article with some interesting takes: https://www.coindesk.com/markets/2021/01/24/crypto-long-shor...
>“To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. More details to come soon. In the meantime, please contact Binance Labs if you think you qualify,"
https://markets.businessinsider.com/news/currencies/crypto-n...
>What does it mean for a financial product to be "otherwise strong" when it is "in a liquidity crisis"?
As to the rest of it, it is similar to any other speculative investment. If they like the future prospects, they'll assist. A liquidity crisis means there are not enough liquid assets to proceed with business.
You can read this as Binance seeking to eat the lunch of those which are unable to withstand depositors running for the exit. If there's no prospect of future luncheons, there's no bailout. The bit about stemming the hysteria and "we're all in this together" is the magnanimous marketing language you'd expect.
This time, please, can we not bail out the bankers?
I get bailing out the banks.
But we can bankrupt the owners, in the case of partnerships, and cancel the shares of public companies.
Crypto can basically function as an extended version of dollarization in countries that have institutionally failed to manage their own currency (think the naira or the Turkish lira).
It’s a fake suggestion since the problem currently facing crypto is insolvency, not illiquidity. No amount of money would make FTX a good asset beyond the value of the cash itself.
whatever your opinion of crypto, exchanges have generally been great businesses. lots of small fees add up to significant revenue. Binance generated $20 billion revenue in 2021.
Lots of things are good businesses, that doesn’t give a neighbouring trash pile value. Any amount of cash pumped into FTX would be better spent capitalising a new exchange. They’re not only insolvent, but fraudulently so in a very public way.
Is there anything Inflation can't do?