Stefan Rust, the CEO of inflation data aggregator Truflation and former CEO of Bitcoin.com, says the United States looks hell-bent on “killing” crypto.
The Federal Deposit Insurance Corporation (FDIC) allowing the sale of Signature Bank to Flagstar Bank on condition that the Michigan-based bank does not touch crypto – in this case $4 billion worth of crypto assets Signature Bank held for its customers – is a clear pointer to this effort, he noted in an Op-Ed shared with Invezz.
He contends that while Silicon Valley Bank had collapsed, Signature Bank was solvent when the New York Department of Financial Services (NYDFS) ordered it shut. This didn’t “make much sense” even amid the banking sector turmoil. But looking at it now, he suggests there was more to it.
“Indeed, what seems much more likely is that the US government came down on Signature, a quarter of whose clients were in the blockchain space, to kill the crypto industry.”
But Rust, a seasoned entrepreneur and avid crypto investor, suggests that killing crypto will not help the US hold onto its status as a global power.
Why the US government is trying to kill crypto
According to Rust, it’s all down to the threat crypto poses to the US’ dominance on the global stage. And this comes from US dollar hegemony, with 80% of world trade denominated in USD.
Can another currency take over from the US dollar? According to Rust, that’s what is behind the weaponization of USD and US policy. It’s what’s driving the US crackdown on crypto.
As you are likely aware, the Truflation CEO’s outlook comes amid a renewed crackdown as evidenced by recent actions against crypto companies Coinbase (NASDAQ: COIN) and Binance by the US Securities and Exchanges Commission (SEC) and Commodity Futures Trading Commission (CFTC) respectively.
The SEC issued a Wells Notice to Coinbase last week, while the CFTC filed a complaint against Binance on Monday. The SEC also recently charged Tron founder Justin Sun.
White House also recently released an annual report that said crypto had zero fundamental value, drawing a lot of criticism from across the industry. Rust says a threat to the US dollar is the main reason.
“This shakedown is truly remarkable and utterly unprecedented in a free-market economy. And indeed, it goes to show how threatened the US government is by cryptocurrency. A global, decentralized, and transparent financial system, cryptocurrency threatens the US’s dominance on the global stage: a dominance rooted in the power of the US dollar as the world’s global reserve currency.”
He opines that if the US dollar is no longer the global reserve currency, many countries won’t be intimidated into complying the US policy for fear of economic sanctions. That scares the American government.
“Be in no doubt: this is why the US government is coming to kill crypto. It is not because of FTX, Celcius, or any other recent scam. The biggest source of funding for crime of any sort remains cash: cold, hard, untraceable, government-backed cash. And the biggest laundromats remain global banks like HSBC, which remains standing despite single-handedly washing millions of dollars for Mexican drug cartels for decades.”
Bitcoin is the “only real alternative”
According to the former Bitcoin.com CEO, the US government could succeed in shutting crypto down and pushing innovation offshore. However, there is the advance being seen with the Chinese Renminbi and which America could find “a little harder to squash.”
And given USD is increasingly weakening as a global currency, some people have suggested the Chinese Renminbi will likely be the successor.
While that’s possible, Rust thinks very few governments around the world will be comfortable with China’s currency as the dominant global reserve currency, highlighting the misgivings towards the Chinese Communist Party.
In his opinion, this leaves Bitcoin as the “only real alternative,” as it is politically neutral and accessible globally.
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