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Money Printer Goes Brrr: Fraud, Confidence, And The Impact of Role of Stablecoins in Crypto

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A stablecoin is a digital currency using blockchain for book-keeping. Still, its monetary policy depends on another fiat currency, whether USD, EUR, or precious metal such as Gold. Stablecoin is filling this gap by providing constant value storage (in terms of fiat currency), plus the convenience of digital payment without the hassles of traditional financial institutions. As of May 2021, the total stablecoin supply surpassed the $100B mark. The value of Bitcoin as a new medium of exchange, paradoxically, makes Bitcoin undesirable.

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Michael Kwok Hacker Noon profile picture

@michaelkwokMichael Kwok

Co-Founder at Decentralized Machine Learning. Transform technology into better lives.

The stablecoin alert is a variation of the crypto-fiat battle.

Every few months, you shall come across articles, tweets, or Reddit discussion threads about the conspiracy of Tether and the USDT stablecoin.

Similar accusations appear again and again, but still, no one can shoot them down yet. USDT remains at the top of the stablecoin billboard, it is the largest issuer globally in terms of tokens created, and volume transacted.

Unlike the above, the purpose of this article is not to debate whether the claims are valid or if any stablecoin is legitimate. Instead, we would like to dig deep into the root cause and discover and uncover the reasons behind its glory, which alarm us all.

Do fate and destiny determine it, or are invisible hands mastering the success behind the scene?

Crypto Is Not Currency Yet

If you have been in the crypto world long enough, you must have remembered the market slaughters that happened in crypto history. Even the flagship cryptocurrency, Bitcoin, has dropped by 80% to over 90% within one year.

It is what the moment investors are calling “crypto winter”. The worse is, winter is not a moment but a period. It usually lasts for several months, if not prolongs to years.

The idealist will say if you HODL your Bitcoin, you will make a fortune eventually.

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But what does it mean indeed? It tells you if you have bought Bitcoin previously and do not sell, you are now a lot richer in terms of US Dollars. Sadly, the denomination is in US Dollars but not in Bitcoin or other cryptocurrencies.

People still believe Bitcoin is a commodity but not a currency.

At present, the crypto economy is depressed in the real world. You have to use fiat currency to purchase most of the goods and services offered. Though Visa announced earlier this year to partner with Crypto.com and Anchorage for digital currency settlement, the settlement currency they chose is not any cryptocurrency but USDC, a stablecoin deemed to have complete redemption for US Dollars.

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The Rise Of Stablecoin

Bitcoin, mentioned initially as a peer-to-peer electronic cash system in the whitepaper, is not a perfect solution for digital payment because of its massive price fluctuations.

People rush in to place heavy bids, overheat the market. The subsequent correction is so deep that it hurts the value storing power (at least short term) of Bitcoin.

The value of Bitcoin as a new medium of exchange, paradoxically, makes Bitcoin undesirable as a new medium of exchange.

The volatile tendency of Bitcoin prompted the emergence of stablecoin. A stablecoin is a digital currency using blockchain for book-keeping. Still, its monetary policy depends on another fiat currency, whether USD, EUR, or precious metal such as Gold.

Thus, stablecoin is filling this gap by providing constant value storage (in terms of fiat currency), plus the convenience of digital payment without the hassles of traditional financial institutions. As of May 2021, the total stablecoin supply surpassed the $100B mark.

First Mover Advantage

The snapshot below suggests that though the market is diversifying, USDT is currently the most prominent stablecoin, followed closely by USDC.

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While USDT had the foresight on the market since 2014, it took nearly four years to have the next stablecoin. This early move established USDT to be the stablecoin with the most significant trading volumes. Plenty of altcoins contain a USDT trading pair as traders widely adopt it.

The original trust — that every USDT is fully backed by US Dollar was not rigorously verified in older days because the demand for stablecoin covered it up.

As long as people are not redeeming simultaneously and a secondary market exists, the one-to-one peg is only a side benefit.

Even if there are occasional suspicious claims, USDT continues to be the main bridge for cryptocurrency and fiat currency traders in the upgrowth market.

Join Hands Or Declare Clone War

Stablecoin finally becomes the arch-rival of fiat currency. It serves from a derivative for the liquidity in the cryptocurrency market to a multi-functional financial vehicle, working on investment, lending, payment, and settlement, which are bread-and-butter businesses for banks.

The claimed one-to-one USD backup reserves from stablecoin issuers, especially Tether, turn out to be some unknown commercial papers, but people still have faith in it.

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It acquiesces stablecoin issuers to print their own money, offending the Governments’ monetary policy autonomy, aka the “financial stability”.

This cannibalization poses a real threat to the financial market that regulators have to put close surveillance on the development of stablecoin.

The money printing power endowed by citizens from no regime is tempting but excessively risky. Some issuers are choosing to give in, complying with regulators, and increasing transparency to the public.

Circle revealed applying for a national banking license in the US and changing their USD reserve with cash and Treasury bonds. Paxos, another issuer, has received conditional approval from OCC to operate as a National Trust Bank.

Meanwhile, Tether, the bellwether, has settled with the Office of New York Attorney General with $18.5M and retreat from New York. A bail essentially but better than none.

Bitcoin As Digital Gold: Bretton Woods 2.0?

Authorities have the upper hand so far, but we cannot cast away the enigma of fiat currency.

Regulators are pressing hard on stablecoin because they suspect it is “money created in thin air”, but crypto enthusiasts will put the same question on regulators’ table. Is “In God We Trust” convincing?

A little piece of history is worth mentioning. Under the backdrop of World War II, in 1944, allied countries opted in a fixed exchange rate to US Dollars, ultimately backed by Gold, to pursue “economic security” against FOREX manipulations.

The Bretton Woods System, which eventually crackdown in the early 1970s due to inflationary monetary policy in the US, making a bank run by allies to convert US Dollars for Gold. The US suspended the Gold conversion and became a fiat currency.

Deemed to be more flexible, central banks gained back their monetary policy autonomy after the unpegging, designed according to self-economic conditions.

It was until the 2008 global financial crisis, which triggered the rethinking of a new international currency. A decade later, Bitcoin is acclaimed as digital Gold, and some have been using it as a currency substitute.

El Salvador

The Central American country is the first to adopt Bitcoin as a legal tender, parallel with US Dollars.

El Salvador was one of the developing countries that carried Dollarization, once hoped to revive its domestic economy by giving up the monetary policy autonomy. Unfortunately, it felt.

From Dollarization to “Bitcoinization”, it is not an easy journey. Around 2 million Salvadorians are working in the US, and remittance from the US sums up nearly 25% of El Salvador’s GDP. Trading activities aggravated the dependency on US Dollars because the US is their major import and export partner.

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The Bitcoin Law in El Salvador is both an economic and political move, but legislators shall not regard national currency simply for domestic reasons. Most of the international settlement today is domiciled in US Dollars, but Bitcoin is negligible.

El Salvador is a bold pioneer ambitiously waiting for Bitcoin to bloom, but whether other international players will chip in is still doubtful because money printing machines are too powerful and attractive.

China, Sweden, the Bahamas, Eastern Caribbean Areas, and the Marshall Islands are all experimenting with their Central Bank Digital Currency (CBDC), and many countries are following.

Expectation and Confidence

Because we trust in the power of the US Government, we choose to accept their Dollars, a fiat currency without collateral as the common medium of exchange across borders, and a leading “asset” that stablecoin mirrors.

Bitcoin is another discipline. With a redefined monetary policy, no one controls the money supply besides the preset lines of codes.

Public confidence is the ultimate remedy. If there is no single sovereignty (such as the example of fiat currency and the derived stablecoin), we prevent inflation from the overissue of banknotes. Still, we are exposed to the risk in an open market, which is about confidence again. The ubiquitousness of the network determines its intrinsic value, not speculation.

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Source: https://hackernoon.com/money-printer-goes-brrr-fraud-confidence-and-the-impact-of-role-of-stablecoins-in-crypto?source=rss

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The Millennium Project Overview.pptx

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“Ethical Markets highly recommends this Overview of all the achievements of our partner, the Millennium Project and its leaders Jerome Glenn, Ted Gordon and Elizabeth Florescu.  We are proud of these achievement and I am honored to still serve on its Planning Committee .

Hazel Henderson, Editor“

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Source: https://www.ethicalmarkets.com/the-millennium-project-overview-pptx/

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Book Review: “Beyond Knowledge: How Technology Is Driving An Age of Consciousness

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A Highly Original Exploration of the Next Stage in Human Evolution

Book Review

By: Hazel Henderson

I enjoyed this book immensely.  As a colleague of Professor Halal some years ago on a tech forecasting project within the World Future Society, I was happy to re-connect and with this invitation to write this Foreword.

“BEYOND KNOWLEDGE: Technology to Create an Age of Consciousness “is a highly original exploration of the next stage of human evolution, as planet Earth is now teaching us directly.  As I have also stressed, the planet is now our programmed learning environment, mirroring back to humans the global problems we have caused due to our limited perception. This feedback from planet Earth is forcing us to mature, as Halal describes in such innovative and useful detail.  We are looking at ourselves and learning to assess in new ways our limited cognition, our emotions and our continual conscious and sub-conscious processing of the realities of our condition.  The growing calamities of floods, fires, superstorms, biodiversity losses, species extinctions and more frequently zoonotic viruses and the COVID-19 Pandemic are Nature’s current lessons and feedbacks to assist our cognitive and spiritual development.

As Halal points out, if we cannot evolve to overcome our cognitive and emotional infancy and mature into full, wise adulthood, we will not survive. I agree and believe that many other species will take over the constantly evolving life processes of planet Earth.   I was forced to confront the “Global MegaCrisis“ which Halal and our mutual friend and colleague, futurist Michael Marien have described so  succinctly.

In the 1960s, I organized Citizens for Clean Air to inform New Yorkers of the polluted air they were breathing. We ran a free ad campaign with the help of a volunteer ad agency and some enlightened media executives.   We showed the late Robert F. Kennedy who was running for his Senate seat, all the sources of this pollution and why we were campaigning to correct the GDP, so as to subtract, not add these pollution costs.  Kennedy’s speech on these problems of GDP at the University of Kansas, became a rallying cry for reform of this obsolete indicator, still too often quoted as a measure of national “progress“!   In 1975, I joined Lester Brown on the founding board of the WorldWatch Institute, and again, I was forced to  face up  to this Global MegaCrisis at every board meeting, as the human effects on planetary ecosystems deteriorated.

So William Halal’s deep dive into how humans have evolved over millennia and created our technological tools is enlightening and demonstrates high ethical principles for examining the ways we must change and mature into deeper consciousness.  Halal shows how our new information tools are reflecting back our need to examine our own consciousness and how we must evolve beyond acquiring scientific knowledge toward also studying our belief systems, our religions and spiritual motivations.

This indeed, is the next page of the human agenda open before us.  This task far outweighs the mad dash of trivial innovations geared to short-term profits so typical of Silicon Valley’s adolescent culture.  Halal instead offers his own innovative approach: seeing and assessing our technologies as our latest “tools of consciousness”!  This goes far beyond the remit of such government research agencies as the US Office of Technology Assessment (OTA) which was shut down in 1996, slaying the messenger informing us of our planetary depredations.  I served on OTA’s Technology Assessment Advisory Council, and I am heartened that the US Congress has an effort by over forty members to fund OTA, and the Biden Administration seems equally committed.

Meanwhile, I have taken Halal’s new tool to heart.  This “tool of consciousness” approach has helped me see myself, my daily work, my virtual electronic presentations more clearly, as well as my moods, attitudes, physical fitness and my preparations for my company’s succession and my own coming experience of leaving this incarnation and going virtual.

In all the chapters of “BEYOND KNOWLEDGE”, Halal uses this guiding spiritual, consciousness framework, to explore how we humans are progressing along the path to the kind of wisdom and maturity necessary to manage our further evolution in the Age of the Anthropocene.

Halal’s chapters on “Uniting Spirit & Science”; “A New Social Contract“;  “Democratic Enterprise“; “Virtual Education“;  and “From Religion to  Spirit to Global Ethics“ provide  deeper grounding in our current situation.  They are consistent with the 16 Principles of The Earth Charter, developed since its launch at the Earth Summit in 1992, and ratified by thousands of NGOs, academics, government officials, cities, investors and business leaders.  I attended its launch in 2000 at the Peace Palace in The Hague and still remain an advocate of this universal declaration of human responsibilities to complement Eleanor Roosevelt’s effort in the United Nations Declaration of Human Rights.  No rights without responsibilities, as we are learning!

This book is a wise contribution to the great global debate on the Global MegaCrisis.  It is also a feast, and provides an enduring roadmap to guide the human family toward a sane, viable sustainable future.  We are living through stressful times, yet stress is evolution’s tool forcing species to adapt.  Breakdowns drive breakthroughs!

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Hazel Henderson is a global futurist and her eleven books and current research continue to map the worldwide transition from the fossil-fueled Industrial Era to the renewable circular economies emerging in a knowledge-rich, cleaner, greener and wiser future. Ethical Markets Media Certified B. Corporation, which Hazel founded in 2004 after 20 years advising the Calvert Group of socially-responsible mutual funds, continues the work of reforming markets and metrics to guide investors toward our long-term survival on planet Earth. In the 1960s, with the help of a volunteer ad agency and enlightened media executives, Hazel organized Citizens for Clean Air to inform New Yorkers of the polluted air they were breathing. They showed the late Robert F. Kennedy, then running for his Senate seat, all the sources of this pollution and why they were campaigning to correct the GDP to subtract, not add, these pollution costs.  Kennedy’s speech on the GDP problem at the University of Kansas became a rallying cry for reform of this obsolete indicator, still too often quoted as a measure of national “progress“!  In 1975, Hazel joined Lester Brown on the founding board of the World Watch Institute, and again, she was forced to face up to this Global MegaCrisis at every board meeting, as the human effects on planetary ecosystems deteriorated. For more, see Hazel’s recent presentation at the Family Office Forum in Singapore, March 5th.  Hazel can be reached at [email protected]

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Source: https://www.ethicalmarkets.com/book-review-beyond-knowledge-how-technology-is-driving-an-age-of-consciousness/

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Researchers make Synthetic Starch out of Carbon Dioxide

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Brimming with bio stories on #regulation, the businesses transitioning to #carbonneutral, the latest investments in #futurefoods.

‘Bioresearch of the Week’ is back with innovations & discoveries in the fields of health, materials, and farming, and ‘Biomass Innovations Under Investigation Part 4: Forestry and Energy Crops’.   And  making Synthetic Starch from CO2 !

Best of the Newsroom 

MeliBio Presents First Real Honey Made Without Bees

MeliBio, Inc. has revealed its real honey, made without bees. The company, which uses proprietary technology, will offer the plant-based ingredient for B2B customers and foodservice

>> Read the article

Germany Reveals First Commercial Plant Making Clean Jet Fuel

German officials presented what they said is the world’s first commercial plant for making synthetic kerosene, which is promoted as a climate-friendly fuel of the future.

>> Read the article

British Army Begins Push to Embrace Renewable

The UK Army opened the doors of its first pilot photovoltaic solar farm late last week, under a £200m programme known as Project Prometheus that is intended to increase the military’s use of renewable power.

>> Read the article

Xi Jinping Announces An End To Coal Use

The President of China announced that China is working to end its coal-fire projects abroad and at home. China accounts for 54% of the world’s coal-created electricity, making the country the biggest consumer of coal.

>> Read the article

French Fashion Group Kering Is Going Completely Fur Free

One of the largest luxury companies in >world, Kering took the decision for all of its brands to stop using any kind of animal fur, demonstrating how consumer demand for sustainable clothing and accessories is increasing.

>> Read the article

ESWET Responds to EP Report on Methane Emissions

European Suppliers of Waste-to-Energy Technology welcomes the European Parliament’s report that “supports bold actions to minimize the damages methane causes to the environment”.

>> Read the article

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Source: https://www.ethicalmarkets.com/researchers-make-synthetic-starch-out-of-carbon-dioxide/

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“Wows, no more cows?” by Nick Silver

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Governments, large corporations and investors are frantically announcing climate change pledges. Trillions of dollars are being invested in the transition to net zero, and many investors are disinvesting from fossil fuel companies, with a resultant hammering of the valuations of these companies, bringing into question their future viability.

To transfer away from fossil fuels in many sectors – such as personal transport and electricity generation – is happening as we speak. getting our power from renewables is now cheaper than traditional sources, and we can perfectly happily drive round in electric cars, with the added bonus of being able to smugly drive past lines of internal combustion engine cars queuing for petrol.

There are more difficult sectors to abate, like shipping. Yet even for these there, is a feasible transition to net zero – for example ships could switch to green hydrogen or ammonia. Admittedly this is difficult; but if you could get the industries to line up and make a quick shift at scale, prices would rapidly drop, at some point in the future a profitable shipping industry would emerge and consumers wouldn’t notice the difference.

Even so, there is one sector which represents about 20 per cent of emissions, which would need to be removed.

There are currently around 1.5 billion cows on the planet. A cow weighs about 10 times more than a human; the total mass of cows is about twice that of the human population. Also, as people get richer, they generally eat more meat, so this number is trending up.

Cows are inefficient machines for converting plants to calories, so they need a lot of land, mainly to produce food for the cows. If we just ate the plants directly, we’d need only about a third of the land that we currently use for agriculture. We could use all this extra land for stuff like growing trees to suck carbon out of the atmosphere, or dare I say, returning it to nature.

I’m just giving the reader a conception here of why cows need so much land. The environmental damage – not just climate but species and habitat loss and so on – caused by these 1.5 billion cows has been catalogued elsewhere and in summary the word ‘catastrophic’ would be a massive understatement. I am also not going to get into a moral debate about the ethics of eating meat.

It is no doubt true that there are some humane farms which treat their cows nicely, but large scale factory farming is too horrible for most of us to contemplate. I’ve never had the misfortune of visiting a meat packer, but from all the reports I’ve read a visit would turn a meat lover vegan. In wealthy countries like the UK, the native population refuse to work in them, so they have to import labour from poorer countries who are prepared to endure the working conditions. Not to put a too fine a point on it, these are shit jobs that no one wants, and do nothing for domestic employment.

The easiest way to reduce the environmental impact of this industry would be behavioural change, people could massively cut down on their meat and dairy consumption. Governments could help this by taxing meat and dairy, and subsidising substitutes, and also running public health campaigns against meat (it would be massively beneficial for people’s health to cut down meat consumption). Instead, they do the opposite, subsidising the meat and dairy industry and blocking anti-meat and dairy advertising.

There has been a trend, especially amongst young and educated, to eat less meat. Data seems to suggest that there have been modest declines in beef consumption in wealthier countries. Yet, without massive government intervention it’s unlikely that this would ever be on the scale needed and also would be swamped out by increasing wealth of consumers in developing countries.

Even so, there is another, technological, fix on the horizon, namely lab grown meat (and synthetic dairy) which should be game-changers. The first lab grown burger costs $280,000, the price has now dropped to $10, and from what we have seen with other technologies such as microchip and solar panels, once new technology is scaled up, the price continues to drop.

It’s quite hard to convince people to switch to being vegetarian, but if you offer people two very similar products – a cow burger and a lab-grown burger –  and if the latter is cheaper and healthier (you don’t need to pump lab-grown meat with hormones and anti-biotics), many more people would switch.

Added to this, the biggest purchasers of beef are companies like McDonald’s which have climate change commitments and face investor pressure to reduce emissions – switching to lab-grown meat for them should also be a no-brainer. The same would be true for multinationals who make dairy products.

The dairy and meat industries have survived scrutiny to date because they are a powerful industry and lobbying group and often rural communities have disproportionately large influence on politics, but also because most people like meat and dairy products and don’t like to be told that this is wrong.

But all this could change, with increasing climate impacts, there is increasing political and popular will to reduce emissions, there will be an alignment of corporate and finance against high carbon emitters. At the same time, there are real (and possibly better, cheaper and better funded) substitutes for meat coming to supermarkets and restaurants. The smart money is already going towards meat and dairy substitutes – for example Oatly, a company which makes oat milk, was recently valued at $10 billion.

The unacknowledged alliance between meat eating voters and dairy industry will be broken, and overwhelmed by the new alliance of politics, popular pressure and big finance. This may seem unlikely, but it’s currently happening to the fossil fuel industry and that seemed even more unlikely until it happened.

Which means that meat producers should and will be looking to switch supply chains to lab-grown meat and synthetic dairy. The likely result is that Big Ag, and large food suppliers, such as supermarkets, will be fine as they can just switch suppliers. But anyone involved in the animal business, such as cattle herders and dairy farmers basically have no long-term future. Sure, there will be a market for small scale, high end, organic producers, but these are only a tiny proportion of the industry.

As always the people least equipped to change will be the hardest hit – small and medium sized farmers. To avoid disaster for these people, governments should be telling meat and dairy producers that that they should look to do something else, and should help farmers and other in the supply chain to re-tool and re-train.

Needless to say they won’t. To any of these people reading, I am sorry to have to deliver this message, and I am sorry to say that you have been let down by your representatives like the NFU and the government for not being straight with you and not having any foresight.

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Source: https://www.ethicalmarkets.com/wows-no-mor-cows-by-nick-silver/

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