Dispatch #75: The Need for Censorship-resistant Money

In this patch of your weekly Dispatch:

• Canada’s counter-protest measures have the Bitcoin world alight
• Decentraland’s MANA on Nexo
• What's the latest in mainstream adoption?

The Big Idea

The Big Shift to Censorship Resistance

A few weeks ago, a group of Canadian truckers started protesting vaccine mandates related to crossing the US border. While the Justin Trudeau government initially dismissed it as a fringe group, the protests have grown and grown in size and elicited a growing response. This came to a head earlier this week when Canada enacted the Emergencies Act, granting the government a set of new powers for the next 30 days.

What caught the crypto world’s attention were new rules that gave banks and financial institutions the ability to freeze assets of individuals and corporations suspected of being connected to the protests without any sort of due process, and without any sort of future liability for doing so. What’s more, all crowdfunding platforms and crypto platforms would be subject to new registration rules.

To some, it seemed like Canada had declared war on its citizens, using financial blacklisting as their preferred weapon. The uproar has been loud and immediate. In the US, for example, a bill was introduced in Congress to affirm the rights of citizens to self-custody their digital assets, making specific reference to Canada’s actions.

It’s not clear what will happen in Canada. What is clear is that this situation is a wake-up call around the need for non-sovereign, non-political money.

The Latest In…

Institutions

A lot of the brands-entering-the-metaverse stories lately have more or less made sense. Fashion brands, entertainment brands, culture brands. Sure, exploring new digital worlds makes sense. But an investment bank? Well, JP Morgan this week opened up a lounge on a plot of Decentraland. It features a picture of CEO Jamie Dimon, a tiger, and a bunch of space to virtually hang out. In addition to the lounge, JPM released a report titled “Opportunities in the Metaverse”, designed to help interested firms and corporations separate the hype from the real opportunities. The question is: can JP Morgan even tell the difference?

The Latest In…

Mainstream Adoption

We could talk about Super Bowl weekend but you already know all about it. An adoption move fewer people saw coming was the appointment of Eun Young Choi, a veteran cybersecurity prosecutor, to lead the US Justice Department’s brand-new National Cryptocurrency Enforcement Team. The entity will identify and dismantle the misuse of crypto and other digital assets. The most interesting part is the reasoning behind the appointment and the words of Deputy Attorney General Lisa Monaco who basically said we will see “cryptocurrency gaining more traction and gaining wider adoption.” Yes, this means more policing, but also – more institutional recognition of crypto’s importance.

The Latest In…

The Nexoverse

• Take one last look at Nexonomics 3.0 as we wave the initiative goodbye for now.
• Fill your MANA potions because Decentraland’s native asset is available for top-ups as well as on the Nexo Exchange for you to buy and swap freely.

The Week’s Most Interesting Data Story

The Correlation Between BTC and SEC Filings

Here’s a fascinating correlation. The first time Bitcoin was mentioned in an SEC filing came in June 2011 in a supplementary list of loan requests from a peer-to-peer lending company. In the subsequent decade, Bitcoin has been mentioned 11,510 times. An overlay of the number of monthly filings with the price of Bitcoin shows a remarkable correlation.

This may seem random, but it makes some amount of sense. Publicly traded institutions, investment funds, and other companies report financials and communicate plans to the SEC. One possible explanation for the correlation is that as the market gets hotter, more of these companies inform the SEC of the potential for them to get involved. It’s a great reminder of just how much data there is out there that can help us understand the changing texture of the industry.

Hot Topics

What the Community Is Discussing

The latest in a long line of energy FUD.

It’s true.

Re: Canada and censorship-resistant money, Lyn Alden put it well.

What to Watch for Next Week:

• Will the Fed be pressured into an early rate hike?
• Will Canada be pressured to back down from financial targeting?
• Which US lawmaker will introduce crypto legislation next?