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Square’s federal comment letter regarding FinCEN’s proposed rulemaking

76 pointsby freerkover 4 years ago

1 comment

seibeljover 4 years ago
One way to look at blockchain technology (let&#x27;s specifically look at Ethereum) is that it&#x27;s an open source platform for value transfer. It&#x27;s an even stronger claim than that - it&#x27;s not like Stripe open sourcing all their code but still running all the servers. Ethereum is an open source platform that is totally permissionless, decentralized, and everyone can join it. In this way, it is similar to the internet itself.<p>What a major US Federal Regulator just announced is that all banks can use blockchains (like Ethereum) to move value, just like they use Swift or ACH <a href="https:&#x2F;&#x2F;www.coindesk.com&#x2F;occ-banks-stablecoin-payments" rel="nofollow">https:&#x2F;&#x2F;www.coindesk.com&#x2F;occ-banks-stablecoin-payments</a><p>As smaller companies now have basically no barrier to entry in the bare metal rails of payments, <i>finally</i> serious innovation in this space can happen outside of heavily financed &#x2F; licensed &#x2F; oligopolistic &#x2F; connected entities. Banks can then voluntarily choose to integrate with one or more open source value transfer networks (blockchains).<p>Look at USDC <a href="https:&#x2F;&#x2F;www.circle.com&#x2F;en&#x2F;usdc" rel="nofollow">https:&#x2F;&#x2F;www.circle.com&#x2F;en&#x2F;usdc</a> This is a regulated token fully backed by audited reserves (unlike Tether (USDT)). There will be some banks, such as for international settlement, that will find this technology better than the existing. There will be some people in foreign countries who prefer a cryptocurrency wallet on their phone to paper cash USD or their (corrupt) banking system (Venezuela, Lebanon, etc.).<p>Even if you are skeptical of blockchain, is it clear to you why this is useful? It&#x27;s the Linux vs. Windows debate, open source vs. closed source, except in finance and payments.<p>Finally, just as every API added to the internet increases the value of the platform itself exponentially (network effect), every new tool and smart contract on the Ethereum network increases the value of the whole network to its users. It is an operating system for finance! This is the value proposition of the Ethereum experiment.
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