The year is 2021, and the nation is in crisis. North Korea has just tested a missile that will soon be capable of delivering a nuclear warhead to the continental U.S. The move took Washington by surprise as the project was likely funded via a new Chinese digital currency, which allowed North Korea to bypass the global banking system. In response, the National Security Council House has gathered in the White House Situation Room to formulate short- and long-term responses.
That is the opening of a 2019 simulation on Cryptocurrency and national insecurity in which Gary Gensler, who is rumored to be the new chair of the Securities and Exchanges Commission (SEC), took part.
Ignoring the dramatic angle of this simulation, much of it has become real now two years on. The dollar is no longer the only convenient means of international exchange. American banks are no longer the policemen of global monetary transfers.
As a catalyst of change, bitcoin and cryptos more widely are re-shaping global finance and global trade. The question is: what does the United States do about it?
The Banker Academic
Gensler spent much of his life working for Goldman Sachs, with little known about the man except he also spent plenty of his time in the power halls of Washington.
As chair of CFTC, he reformed the institution and woke it up to the challenge of regulating the $400 trillion derivatives market.
Soon after, he went to MIT where he taught on global finance and blockchain tech, with some papers suggesting he is effectively obsessed with this new invention.
I remain intrigued by Satoshis innovations potential to spur change – either directly or indirectly as a catalyst, Gensler said in late 2019, adding:
The potential to lower verification and networking costs is worth pursuing, particularly to lower economic rents and data privacy costs, and promote economic inclusion.
Further, shared blockchain applications might help jumpstart multiparty network solutions in fields that historically have been fragmented or resilient to change.
Even in this slightly less ambitious ...
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