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Crypto Research

The US Stablecoin Bill is coming soon

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Yes, we are talking about the United States Stablecoin Bill. It’s a plan that will gradually regulate the stablecoin peg with U.S. dollar reserves via central bank-issued CDBCs. The aim is to end the current fiat domination financial system, creating a diverse nationwide banking system with centralized clearing and settlement centers. The Stablecoin Bill will implement these changes along with regulations to restrict the assets that can go back to the stablecoin reserve and help the cryptocurrency to work more efficiently with digital currencies like bitcoin and Ethereum.

What is a Stablecoin?

Stablecoins are digital assets that have been developed to meet certain requirements. They’re created by distributed, distributed ledger technology (DLT) systems, and used as a digital currency. The goal of the stablecoin is to avoid market fluctuation and to create a stable peg of currency such as US dollar. It is an intermediate digital currency that inter-connect the digital currency to fiat currency. It is a private reserve that can compete with the Federal Reserve and has more flexible monetary policies to help the economy weather the uncertainty of the financial crisis.

How Does the Stablecoin Bill Work?

The detail of the Bill yet needs to prevail. However, the sign of government collaboration is a great way to help cryptocurrency transit into a more institutional setup. The goal is not to prohibit the usage of the stablecoin but rather to avoid abusing the use to harm society. To prevent rug pulls, scams, bankruptcy without protections, and founders running away, the Bill hopes to bring the community together on the right track.

Federal Reserve Updates its CBDC policy soon

By 2020, the Federal Reserve will begin researching “CBDC” or Central Bank Digital Currency and provide an alternative to dollar usage. A way to shift away from traditional monetary debt (limited debt) into digital debt (infinity debt). However, the transition has to be laid out on how the currency’s infrastructure is to be implemented and regulations to prevent any potential harm. We are yet to see how the policymakers position themselves in the future money.

Other Banks and Financial Companies Will Be blessed with Crypto Assets

On May 1, 2019, all major U.S. banks will begin offering customers the option to purchase up to an unlimited number of digital assets in the name of a virtual bank account. Customers can create an account and hold various digital assets like Bitcoin and Ethereum. The new platform will be managed by a third-party, and the funds will be stored in an encrypted digital wallet. Many existing crypto exchanges convert themselves into digital bank. However, the financial downturn in 2022 has been a rough environment to push many crypto businesses out. We are still watching how the market downturn can boost innovation further.

Conclusion

The recent wave of blockchain-based innovations has excited investors and potential customers worldwide. But what are the long-term effects of these developments? Are we really in the era of digital assets? Or are we just witnessing the “first” of many such technologies getting implemented one day? How the policy and regulation will change the crypto industry? There are many unanswered questions, but the future is bright.

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Crypto Research

Crypto is a good investment or not

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Many people buy crypto to believe it is a great investment. However, it may not be the case.

I asked ChatGPT about the crypto investment and here it is:

Investing in cryptocurrency can be a good opportunity, but it also comes with high risk and volatility. It is important to thoroughly research and understand the cryptocurrency market before investing. Additionally, it is recommended to diversify your investment portfolio and not to invest more than you can afford to lose.

Here are some misconceptions:

First, crypto is not a traditional investment that requires a conventional way to invest. Instead, it is a catch-or-miss investment that you really need to time the market to make profits.

Second, you do not need to hold for too long if you need money quickly. Crypto tends to perform badly long term than average assets did.

Third, high risk only sometimes has high rewards. Many crypto with high risks may not ever provide high returns eventually and many go to zero instead.

Last, do not go FOMO because you are likely to become a bagholder.

There is not missing out and it is too late in the crypto. Rather, you should always keep an eye on the market.

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Crypto Research

Mother of all bubble

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We are heading into a bubble economy and there is one that is about to pop.

ChatGPT suggests that a financial bubble is:

A financial bubble is a situation in which the price of an asset, such as a stock or a commodity, becomes artificially inflated due to excessive speculation and investment. This can lead to a situation where the market becomes overvalued and eventually collapses, resulting in significant losses for investors. Bubbles can occur in a variety of different markets and can be caused by a number of factors, including low interest rates, economic growth, and investor sentiment.

Let’s take Tesla as an example.

Tesla CEO is Elon Musk, who purchased Twitter last year and believed the company can help Tesla to make more profits.

Does it? Or he tried to inflate Tesla instead?

If you go to Twitter, there is less opposition than a supporting voice.

Elon Musk sells Tesla cars and Tesla stocks.

People purchase cars to help pump the stock price and when stock price goes up, people want a new Tesla.

Despite all the bad reviews about the car and its questionable autopilot feature, Tesla cars sold quickly and stock goes up no question.

Is this a Ponzi scheme?

Similarly, cryptocurrency is also highly speculative.

It goes up a time to time, but people buy the narrative without further investigating how useful the crypto really is.

What if people stop buying the crypto, will that still go up?

What if the economy is so bad and the interest rate is high that people have less money to buy more crypto?

We will see how it goes.

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Crypto Research

One more thing NFT can do

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California will have a pilot program to use NFT to record car titles as an innovation of record management. 

ChatGPT stated NFT is:

NFT stands for “non-fungible token.” It is a digital asset that represents ownership of a unique item or piece of content, such as a digital art piece or collectible. NFTs are created and stored on a blockchain, which is a decentralized digital ledger. This allows for the creation and transfer of ownership of digital assets in a secure and verifiable way.

Finally, the government has realized the use of the blockchain, and it will reduce government spending while providing more accurate information to citizens.

I think blockchain has more utilities other than money. Digital money is the first step in testing society’s compatibility, but the blockchain should focus more on providing services rather than investing to people.

That blockchain service can be essential for society later rather than simply going to moon-style investments to create unsustainable pump and dump.

Such government collaboration is the first step to making blockchain a social system.

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