CryptoPoint, CryptoCounterpoint — South Korea and Europe Tackle Regulation
Vladislav Ginzburg and I went AWOL last week, but we’re back on our bullshit this week with a new episode of Sunset Crypto and a fresh take on links.
On our last Sunset Crypto recording, I admitted that I feel compelled to lift people up during crypto downswings and can’t help but temper excitement during the spikes and good times. A true contrarian.
Today’s links appeal to the devil’s advocate in me and hopefully help both haters and crypto acolytes approach the space with perspective.
It’s no secret that different countries and cultures view crypto through their own lenses. Today, we’re going to examine news coming out of South Korea and Europe in sort of an upside/downside way. Hope you’re ready for me to argue with myself, because that’s what you’re getting.
South Korea, Scions of Crypto
Other governments may have committed more fully to crypto, but at this point, South Koreans and Japanese pretty much lead the way in the crypto world. That’s hardly breaking news, it’s been that way for some time. Price predictors often point to rapidly moving sound bytes that emerge from South Korea as reasons for price movement in crypto. I’m still not a fan of lazy headlines that move prices through fear or FOMO and have become increasingly bearish on singular explanations for why prices move the way they do. I just don’t think anyone can possibly piece together the mosaic of data points large and small into meaningful trend analysis that lasts for longer than an instant.
Time is better spent trying to figure out adoption patterns, and news out of South Korea today is very positive in that regard. CCN’s headline, which states that a top Korean regulator will loosen crypto exchange regulations, takes a small but misleading leap. In fact, here are the most relevant quotes:
The FSS will collaborate with the FSC when an inspection on policies and financial institutions has different configurations associated with different scopes.
Vague at best.
There are a lot of issues that need to be addressed and reviewed. We can figure them out but gradually.
Again, hardly a commitment to open the floodgates.
Wet-blanketing aside, even the mere intention to review stringent regulatory polices is probably music to the ears of executives at Bithumb and their ilk. Frankly, this is probably a good framework for how countries can approach crypto regulation. Tighten the screws, then once the dust settles and more people realize that crypto has been miscast as a tool of the underworld, open the doors to sanity.
The one concern I have is that exchanges will probably become, for all intents and purposes, their own lobby in different cryptocurious countries around the world. If that comes to pass, that will be the end of the debate over whether exchanges are centralized or decentralized.
Europe Wants More Oversight
Speaking of lobbying, some self-interested European stakeholders want more, not less regulation. Maybe we shouldn’t be so cynical, because the goal here is to use regulation as a means to legitimize the space. More and more I find myself disagreeing with the notion that government-dictated laws should be the force that validates whether this space is legitimate.
The value of crypto is its community and the community clearly believes in its legitimacy. So, why should the type of body that crypto was designed to disrupt get to decide whether that potentially transcendent force is clean or dirty? Also, why should people in crypto be asking for people to help them legitimize what they’re doing?
This is probably a good space to draw a line between exchanges and traders and the rest of crypto. We’ve talked about this on Sunset Crypto, but there’s a huge difference between seeing a profit opportunity and believing in non-trading use cases. The opportunistic finance crowd wants a way to feel better about profiting from crypto without the bad PR, hence the desire for regulation.
That doesn’t mean they’re wrong — if you get lost in crypto Twitter every now and again, you might think that the world is revolting en masse against governments and other centralized entities. I can’t stress this enough — centralized entities are FINE. Crypto hasn’t disrupted them on a large scale yet, which means that people still put their faith in governments and banks. Of course people will look to those agencies to determine whether crypto is an underworld device or money for the modern age.
I declare myself the winner of this debate against myself by unanimous decision.
