[New post] Interbank Market News Scan: The crypto-digital world finds the fiat currency worthless …
Alton Drew posted: " 30 July 2021 The Takeaway: The crypto-digital world finds the fiat currency worthless … The past couple posts I have been harping on whether Amazon or Facebook can create a viable digital nation-state. Right now, I am putting Amazon in lead, "
The Takeaway: The crypto-digital world finds the fiat currency worthless …
The past couple posts I have been harping on whether Amazon or Facebook can create a viable digital nation-state. Right now, I am putting Amazon in lead, but if Facebook can create a more viable transactions-based economy rather than relying on being a pure private data aggregator and reseller, then Facebook may have the potential in the longer run to rival Amazon.
For now, occupants of the digital world are not placing any crypto-monetary value on fiat currencies. I don't see this no-value perspective changing any time soon on the part of digital world residents. For example, according to OANDA data from twelve months ago, USD/ETH was priced at .0031. Today, the price of USD/ETH is at .0004. I believe the more closed-loop the digital world can remain, the less the digital world's demand for fiat currency.
Holders of cryptocurrency are still interested in holding crypto as an asset versus a medium of exchange for trade even though the rhetoric is quick to describe crypto as a payment system as well. Examples of commercial entities accepting crypto as payment should be discounted by the preference for holding crypto as an asset versus medium of exchange.
On the other hand, I am mindful that on a global basis crypto as a medium of exchange is creeping into consumer mindset with El Salvador's decision to accept crypto as legal tender. It is way too early to tell what degree of success crypto will see in the Central American nation. In the meantime, public policy in the United States is to treat cryptocurrency as a digital asset and until the time comes where legacy nation-states view the digital world as a trade partner, USD/ETH and USD/BTC will be priced at zero for a while.
Alton Drew
For a consultation on any regulatory or legislative discussions or announcements, please reach out to us at altondrew@altondrew.com for information on consultation rates and to reserve an appointment.
Rates reported by the Federal Reserve (Release Date 29 July 2021)
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