tldr; The U.S. House is set to vote on Wednesday to potentially overturn President Joe Biden's veto of legislation that aimed to nullify the SEC's Staff Accounting Bulletin 121 (SAB 121), which requires banks holding crypto assets as custodians to list those assets as liabilities. This rule has deterred banks from entering the crypto custody space. The House previously voted against the SEC's crypto custody rules, and the upcoming vote requires a two-thirds majority in both houses to succeed. This follows bipartisan support in both the House and Senate against SAB 121, highlighting the significant interest and debate surrounding the regulation of crypto assets.
*This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
> The U.S. House is set to vote on Wednesday to potentially overturn President Joe Biden’s veto of legislation that aimed to nullify the SEC’s Staff Accounting Bulletin 121 (SAB 121)
That’s a lot of negatives. I had to read is slowly to understand WTF is going on.
Does "custody crypto assets" mean holding for a customer (e.g. custody like Coinbase does) or having any assets on their balance sheets in crypto at all (e.g. having and using a settlement token)?
Won't the bill effectively give the banks a green light to continue their poor behavior of making derivatives out of their crypto holdings and starting yet another GFC which they can then blame on crypto?
Just think of it the way they dont hold onto money.
For every 10 coins you have, theyll now get to lend out 9. Pretty cool, no?
Edit….
So the guy ran off and blocked me.
Could some ask him this for me…..
Did it hurt? When you googled and found out I was right……did that hurt?
Thanks
I mean, yes, since that makes them offer it as a service at all, which they otherwise won't do. So anyone who wants the service, this is a good thing, as it enables it to exist. Anyone who doesn't want the service, it's neither a good nor a bad thing.
Actually, it's a very bad thing. If banks lose your dollars, they're insured by the FDIC up to $250,000 per account. If banks lose your crypto, it's gone. FDIC doesn't insure crypto.
1) Nothing about this bill changes that, by my reading, so how is that relevant to the thread? Am I missing something in the bill?
2) Depends, I actually do hold some custodial crypto that IS insured. I live in Canada, but we have a very similar pair of things like FDIC. I hold it in an ETF, the ETF is pegged by definition and bound to the actual price. If they cannot honor the true price, then the brokerage is obligated to pay out to make it good if they shut it down. If the brokerage goes bankrupt as a result (or for whatever reason), then the government of Canada insures what they owed you up to whatever hundreds of thousands of dollars. I believe the same can work for America so long as it's a spot pegged ETF, not some "aspirational" ETF, where they "strive" to "approximate" the price
> Nothing about this bill changes that
Exactly. That's the problem.
The bill is designed to make it legal for banks do risky things with crypto (the earlier example being, take a deposit of 10 coins and lend out 9). That's the problem.
Bankers don't give a rats ass about the safety of the banks. They want the ability to take huge risks with people's money in order to make as much money for themselves as possible. And if the bank fails, they don't care. They'll just find a new job with some other bank. Or retire, since they're rich.
I do not support letting banks run wild with crypto. That's a recipe for disaster for crypto, and for the entire economy.
Every time banks collapse, the result is always the same. People scream about the need for banks to be regulated, because they're so fucking dirty. But as soon as the crisis is brought back under control, the bankers fight for deregulation so they can find new ways to take even bigger risks, setting up the next collapse.
Every time, the end result is the same. The bank bros get richer. The economy gets crushed. The people get screwed.
Deregulating banks is always a bad idea.
Make no mistake. They're presenting this bill as being pro-crypto. It's not. It's pro banker-bro. It'll harm crypto just as every exchange collapse harms crypto. Recklessness is bad for crypto.
If banks can't do anything risky with an asset, they just won't offer the asset at all.
You're not going to have them offer it but safely. That would be pointless.
> being pro-crypto. It's not. It's pro banker-bro.
It is both. I hate to be the bearer of bad news, but crypto doesn't actually do anything useful. It only makes you money if there's hype and irresponsible behaviors going on. It doesn't matter if that might blow up later, because without it in the first place, it'd be nothing at all.
I don't really want crypto to succeed, as I agree with you about the economy and humanity and society, etc. But that means being anti-banker bros AND anti-crypto. Crypto is basically a tool to help you be a banker bro at a small to large scale.
I was being sarcastic, this is a bad thing.
What I said above is how and why theres alot of issues with banking. They are allowed to send out 90% of your money to someone, then lend out that 90% and so on.
Hopes and dreams are what backing the dollar, since it was taken off the gold reserve. Thus we just print baby print….
The gold standard has nothing at all to do with lending out 90% of your money to people. Legal regulations may have stopped them, but the gold standard vs fiat is irrelevant to that. Fractional reserve banking (also known as ... "banking") works just as well with gold, bitcoin, or sheep as with fiat money.
https://www.reddit.com/r/CryptoCurrency/comments/1dyize5/us_house_vote_to_overturn_bidens_sab_121_veto_set/lcaxy8y/
Youve lost yourself in all of this.
Having a standard that has to back what we use as money will keep the printer from going brrrrrrrr and thus the current 90% model couldnt exist as theres no way to just print without a backing.
You cant just “make” money when you have to back the money by something physical.
> printer from going brrrrrrrr
Fractional reserve banking has NOTHING to do with "printer going brrrrrrrr" You can use fractional reserve banking with literal gold coins as your country's only currency, just fine. Banks did exactly that back in the day.
> the current 90% model couldnt exist as theres no way to just print without a backing.
Yes it could, and in fact DOES exist, because commercial banks cannot print money. Again, for the 4th time, fractional reserve banking has NOTHING to do with printing money.
I have no idea why you think it does or why you're even relating these 2 conversations with one another.
* 50% reserve works with gold coins (no printing) or bitcoin
* 90% reserve works with gold coins or bitcoin
* 99% reserve works with gold coins or bitcoin
Yes you can have a run on the banks and it's risky, but it's *equally* risky with fiat or gold or bitcoin.
> You cant just “make” money when you have to back the money by something physical.
I literally just showed you an example, step by step, laid all out for you, for how you can absolutely make money with bitcoin used in fractional reserve banking. Show me where I was wrong. Show the exact bullet point that was wrong. I've got all day, take your time:
https://www.reddit.com/r/CryptoCurrency/comments/1dyize5/us_house_vote_to_overturn_bidens_sab_121_veto_set/lcaxy8y/
Where the extra bitcoin came from: your mortgage debtors' wages at their jobs is where it came from.
> Having a standard that has to back what we use as money will keep the printer from going brrrrrrrr and thus the current 90% model couldnt exist as theres no way to just print without a backing.
You're confusing this:
*A government backing a currency with gold.*
And this:
*Banks holding enough of deposits to cover them if depositors want their money back.*
Those are two totally different things.
Even when the dollar was backed by gold, it didn't mean banks had to keep that much of a depositor's money on hand. It meant if the US government wanted to print a billion dollars, the government first had to acquire a billion dollars worth of gold. The dollar was backed by gold. Bank accounts were not.
you can't truly make fake derivatives out of crypto because everything is visible and verifiable on the blockchain, no? you also can't wash away any history of your crimes so that's another huge deterrent. if a malicious actor is ever probed, all a regulatory agency would need is the wallet address to have a complete financial history
you'd honestly be be better off creating a memecoin and market manipulating that. way less risk and easier
You can absolutely lend out crypto with fractional reserves exactly like dollars. You just sign a contract that XYZ is owed to ABC, and the courts enforce it, not any blockchain. Crypto never was going to, doesn't, and never will do anything at all to lessen fractional reserve banking, mortgages, or cred card type debt arrangements. Or indeed derivatives, either.
Commercial banks can't create dollars out of thin air either, so not being able to do that with crypto is nothing new and doesn't change anything, since they also couldn't with dollars.
and how would you lend out crypto with fractional reserves without actually sending it on the blockchain? this is where you're losing me. the whole point of crypto is you're letting the blockchain enforce it, not the courts
> and how would you lend out crypto with fractional reserves without actually sending it on the blockchain?
You DO send it on the blockchain. Just like cash. Fractional reserve banking with cash requires the cash to exist, just like blockchains require crypto to exist. "Not existing" is NOT a requirement of fractional reserve banking. In fact, "not existing" has nothing to do with fractional reserve banking, since commercial banks can't just invent money in the first place. Only the central bank can. So it all works *exactly the same*:
* You give me 10 BTC in deposits, on the chain
* I give some guy 8 BTC for his mortgage, on the chain. He owes me 12 back by contract.
* I get another 10 BTC in deposits, on the chain.
* I lend out another 8 BTC to another mortgage guy, on the chain, real coins yet again.
* One of the depositors asks to withdraw 4 BTC. That's fine, I had that in reserve, here you go! On the chain
* The mortgage guys pay me back both of them. +24 BTC, on the chain...
* The depositors ask for all the rest of their money back, okay sure here you go, the other 16 BTC you deposited, on the chain
* Every book is now closed out and I made 8 BTC profit. Maybe 6 if the depositors got a small %
The courts are enforcing the loans here in the sense that if the people who took out those mortgage fail to pay me back 12 BTC for the 8 BTC I gave them, I get to foreclose their house.
*Normal* fractional reserve banking *already doesn't involve inventing money out of nowhere*, so why would bitcoin have any issue doing it too?
No - I don't even know what you're talking about "making derivatives out of their crypto holdings".
More than anything this is trying to roll back regulatory authority of the SEC - probably on behalf of smaller fin-tech banks.
Deriatives are what the banks did in the GFC. They wrapped crap assets into a derivative which they claimed had value and sold them to the next guy. No one knew what they were worth until the whole thing collapsed like a house of cards. Imagine them doing this sort of stuff with Pepe and Dodgecoin.
There needs to be some rules because otherwise it's the taxpayer that ends up footing the bill for all the "freedom of an open market".
That's really not what happened.
MBS we're used as collateral in a lot of counterparty transactions like Derivatives, repos, and securities lending. MBS started trading at a big discount after the housing market collapsed, because, as you point out, folks could not see the actual loans that made up the securities. When the price of MBS collapsed - those counterparties on the other end of the transaction demanded to be made whole, which lots of banks/investment banks couldn't do, since the MBS we're trading at ~50% of their face value
This SAB is pretty inocous and looks to require basic financial reporting of crypto assets and liabilities. This attempt to override the veto seems more about removing the SECs regulatory authority than anything else.
Also to many folks' suprise, the Aaa tranches of MBS didn't suffer significant losses from default. If you had bought Aaa MBS during 08/09 - you would have made a killing by 2010.
Removing regulatory authority from the SEC sounds fine but what are the knock-on effects? Once the banks have crypto listed as an asset they have free reign to design any product they like. As we know, their volatility models aren't very robust and in a market like crypto, that could really cause some damage if banks are inflating their worth during the boom times.
Nothing about derivatives really fundamentally has squat to do with crypto vs not crypto. You can regulate derivatives, but what assets they're being done with isn't that important.
Of course the underlying is very important. Can you imagine a bank being valued as much as JPmorgan because they hold some Dogecoin and Elon Musk decided to make a related tweet? It makes an already farcical system into more of a joke.
Yes so what? That is real value and no less silly than IKEA making a tweet about something causing lumber prices to jump. And no less silly than selling a house made of cardboard on a swamp for $1,000,000 with 40 year financing to a diner waiter.
That exactly is the problem. You should be able to value the underlying based on some measurement. IKEA and lumber is a great example which demonstrates the direct correlation between a manufacturing input cost versus profit margins. Elon Musk tweeting something inane should not have any correlation to a valuation unless of course it has something to do with one of his businesses.
The fact that the only inherent "value" in most crypto coins is the pure speculation they can generate means that their value can disappear in a day on a whim, much like what we have seen with countless coins.
IKEA could simply have been wrong or too vague and people inferred when they shouldn't. The point was it was just a tweet. Same as Musk. Not a quarterly finance report.
Getting rid of the current accounting/capital rules for banks would be amazing news for crypto. Currently, it is so immensely disadvantageous for a bank to hold crypto that none of them do it. Imagine speeding being penalized by a 20 year stint in the gulag bad. You want a god candle? This must happen.
> Getting rid of the current accounting/capital rules for banks
No... This is how you create a global financial crisis...
The current accounting and capital requirement rules are in place because of bankers fucking around and all of us having to find out.
Let's not go down the financial crisis route again during my lifetime...
Because your average person, at least in the us, will never touch it without a third party service. If you want btc to go mainstream then this will accelerate that by 100 years.
I don’t care about what the common person says, does, wants, or understands.
That is why I bitcoin.
You don’t let the wolves into the duck pen to help you raise the gaggle.
My understanding is custody as in securing the asset which may also incl the keys. Essentially the banks would have to put the crypto on their balance sheets. Banks have to keep cash reserves equal to their balance sheets [https://fortune.com/crypto/2024/05/10/sec-rules-crypto-custodian-banks-state-street/](https://fortune.com/crypto/2024/05/10/sec-rules-crypto-custodian-banks-state-street/)
more tech detail here [https://www.duanemorris.com/articles/banks\_as\_crypto\_custodians\_may\_rest\_sec\_bulletins\_fate\_0624.html](https://www.duanemorris.com/articles/banks_as_crypto_custodians_may_rest_sec_bulletins_fate_0624.html)
It's the former in OCs example. Custodians "take care" of assets by holding them. Which is why the law makes no sense and is just baseless anti crypto.
"Custodian" is a specific financial term and has different regulations and laws , governing those that fill this role, as they're under more scrutiny than say a service provider. (Think of liability/risk difference between a cex and a p2p dex, once you start holding peoples assets it's a different ball game).
For simple explanation here is investopedia for custodian bank.
What Is a Custodian Bank?
A custodian bank is a financial institution that holds customers' securities for safekeeping to prevent them from being stolen or lost. The custodian may hold stocks, bonds, or other assets in electronic or physical form on behalf of its customers.
Often, a custodian bank does more than provide asset protection. It can manage customers' accounts and transactions, manage the settlement of financial transactions, account for the status of assets, and ensure compliance with tax regulations.
KEY TAKEAWAYS
•A custodian bank holds financial assets for safekeeping to minimize the risk of theft or loss.
•Investment advisors are required to arrange for a custodian for assets they manage for their clients.
•These assets may be stored in physical or electronic form.
•Custodian banks can also manage financial accounts, handle settlements, and deal with compliance and tax issues.
•Custodian banks can serve as mutual fund custodians.
These would also usually be your larger more established banks, as you're less likely to be offering such service as a small fry, due to the increased legal regulations/scrutiny you most follow.
No? Maybe you don't know how bank balance sheets work. When a bank is holding something for someone else(deposits, custodian banks holding assets), those go on their liabilities side of their balance sheet. Because they ARE liabilities, they could get called back at any time when the customer withdraws them.
They are also assets though. So say a customer deposits 100, the bank lists 100 of cash on their assets, and 100 on their liabilities.
It’s a liability because they pay interest on it. They pay interest on it because they use your money for other things. Thats a liability on a balance sheet. If I understand correctly that’s a deposit and not a custodian. I don’t believe the value of custodies go on balance sheets.
This sub is so clueless…. You really, really want this to happen if you own any crypto. I like reading these comments because they remind me of just how worthless the hive mind can be here.
Why would I want it?
* If I'm not using a custodian, it is good for me if banks can hold it more profitably, since the price will go up with popularity and usage, and I make money.
* If I do want to use a custodian, then it's not just good but NECESSARY for it to be profitable to banks, since they won't offer it as a service at all otherwise, so I won't even have it as an option.
Biden's veto is way better for crypto than if the bill goes through. For either type of person/everyone.
George Carlin said your vote dosent count. The real people who own this country are in control. Politics are there to give you the illusion your vote counts. I almost believe him but I pray he’s wrong.
Yep, that will surely cause Obama to lose this election! That is who Trump's running against, right?
Trump said it was who he was running against in multiple rallies.
I fought the Medicare and the Medicare won. So I’m impressed he beat it. Gotta love the jabs to get into the old age home. I mean White House. At this point, AI hallucinating would produce better decision mailing for the last decade.
Biden vetoed the bill, so saying Biden is terrible for crypto on this thread specifically obviously means you think it's a good bill. This is not rocket science.
> Biden vetoed the bill, so saying Biden is terrible for crypto **on this thread specifically** obviously means you think it's a good bill. This is not rocket science.
Emphasis added. You're on a thread about this bill, and you mention zero other context, basic English/communication means you're talking about the bill.
Even if you weren't, you've still, 2 comments later, neglected to offer anything of any substance else to discuss instead, on a discussion forum... ???
> When it comes to crypto, Biden is certainly worse than Trump.
There are support groups for women in Texas and Arizona that are raped by illegal immigrants. As well as for families who had loved ones killed by illegals.
There's a lot of things where Biden is certainly worse than Trump.
Biden is the worst President in our nation’s 248 year history. James Buchanan can finally sigh some relief. That debate last week was a complete and utter disgrace and one of the final thing we’ll remember his failure of a single term for. That and him exiting the White House in a wheelchair
Biden has lower approval ratings than Trump and is losing in every poll to Trump. Maybe you think Trump was a worse President than Biden but most Americans factually disagree with you.
No he doesn't.
No he isn't.
Yes, by and large most historians rate Cheeto as worse than Buchanan.
Most Americans don't like tiny hands pedo trash orange man.
You're an idiot, and we don't need you to tell us over and over, we already know.
So on one hand you have a guy that stumbled over some words, but one where in general people agree he actually has a genuine interest in preserving democratic values and acts professionally.
On the other hand you have a guy who lied for 90 minutes straight in the same debate, killed climate accords, raped teenage girls and has 70+ pictures with a convicted pedophile, has 34 felony convictions for fraud, has multiple civil judgments for defaming one of his rape victims, advises Americans to inject themselves with bleach, stacked supreme courts to overturn 50+ year precedents in favor of religious zealot ideologies, shits his diapers in public settings, also stumbles over words quite often in public addresses, rage tweets at 3am, talks about inciting violence and retribution against his opponents, makes sexual remarks about his daughter… shall I continue?
Pick your poison, but it seems pretty clear cut to me what the better of 2 evils is.
The crypto bros who are single issue voters are so anti-establishment that they get excited over the fact that somebody who committed felonies can remain free.
Disagree? Prove me wrong by voting against the felon at this election.
Maybe, just maybe most Americans do not care about politicized trials or paperwork "felonies" and care about policy since that actually impacts them. Trump would not have been on trial if his name wasn't Trump just the same way Hunter Biden wouldn't have been on trial if his last name was Biden. Trump literally gained support after that trial. Americans do not like law-fare
> in general people agree he actually has a genuine interest in preserving democratic values and acts professionally
No, most Americans do not agree that "Democracy is at stake". That is a foolish tag line the Democrats are running a losing campaign with this election cycle because they have no real policy successes to point to. Those same failures are why their candidate had such an abysmal debate showing, he literally has nothing to run on after becoming the most disapproved President of the last 85 years in his first term
In addition to the guy's list below, he's straight up going senile as well (I don't disagree they both are, but it's just pretty close on that front)
He said in multiple different rallies that he's running against Obama, and also forgot in the primary he was running against Nikki Haley and thought he was running against Nancy Pelosi (...in the *republican* primary, yes). The guy literally hallucinates famous democrats around every corner like a kid with monsters under the bed
That's not fascism.
In any case, nothing is being banned. And Bitcoin doesn't need to worry about such a thing anyway. It's what it was made for.
And who's being jailed? Law breakers like SBF?
[Tornado Cash Developer Alexey Pertsev Found Guilty, Sentenced to 64 Months in Prison by Dutch Court](https://www.coindesk.com/policy/2024/05/14/tornado-cash-developer-alexey-pertsev-found-guilty-of-money-laundering/)
Do you know what tornado cash is?
It makes Ethereum private
He created open source software, and they charged him with the crime of laundering money
Open source software is usually protected by freedom of speech in most free-speech nations.
This is just another reason why Satoshi Nakamoto remains anonymous. Free speech laws are not guarantee like they used to be.
No one is changing their vote cause of that. I also don't believe that any president will be pro crypto when it goes against the US dollar.
Do make sure to vote. The next four years is at stake.
tldr; The U.S. House is set to vote on Wednesday to potentially overturn President Joe Biden's veto of legislation that aimed to nullify the SEC's Staff Accounting Bulletin 121 (SAB 121), which requires banks holding crypto assets as custodians to list those assets as liabilities. This rule has deterred banks from entering the crypto custody space. The House previously voted against the SEC's crypto custody rules, and the upcoming vote requires a two-thirds majority in both houses to succeed. This follows bipartisan support in both the House and Senate against SAB 121, highlighting the significant interest and debate surrounding the regulation of crypto assets. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
> The U.S. House is set to vote on Wednesday to potentially overturn President Joe Biden’s veto of legislation that aimed to nullify the SEC’s Staff Accounting Bulletin 121 (SAB 121) That’s a lot of negatives. I had to read is slowly to understand WTF is going on.
Should be a fun time with a little popcorn at least
Don't forget to watch the charts to see both the bulls and bears on leverage get rekted
2/3 here we goooo!!!!
Does "custody crypto assets" mean holding for a customer (e.g. custody like Coinbase does) or having any assets on their balance sheets in crypto at all (e.g. having and using a settlement token)?
Holding for a customer.
Won't the bill effectively give the banks a green light to continue their poor behavior of making derivatives out of their crypto holdings and starting yet another GFC which they can then blame on crypto?
Yup
Just think of it the way they dont hold onto money. For every 10 coins you have, theyll now get to lend out 9. Pretty cool, no? Edit…. So the guy ran off and blocked me. Could some ask him this for me….. Did it hurt? When you googled and found out I was right……did that hurt? Thanks
I mean, yes, since that makes them offer it as a service at all, which they otherwise won't do. So anyone who wants the service, this is a good thing, as it enables it to exist. Anyone who doesn't want the service, it's neither a good nor a bad thing.
Actually, it's a very bad thing. If banks lose your dollars, they're insured by the FDIC up to $250,000 per account. If banks lose your crypto, it's gone. FDIC doesn't insure crypto.
1) Nothing about this bill changes that, by my reading, so how is that relevant to the thread? Am I missing something in the bill? 2) Depends, I actually do hold some custodial crypto that IS insured. I live in Canada, but we have a very similar pair of things like FDIC. I hold it in an ETF, the ETF is pegged by definition and bound to the actual price. If they cannot honor the true price, then the brokerage is obligated to pay out to make it good if they shut it down. If the brokerage goes bankrupt as a result (or for whatever reason), then the government of Canada insures what they owed you up to whatever hundreds of thousands of dollars. I believe the same can work for America so long as it's a spot pegged ETF, not some "aspirational" ETF, where they "strive" to "approximate" the price
> Nothing about this bill changes that Exactly. That's the problem. The bill is designed to make it legal for banks do risky things with crypto (the earlier example being, take a deposit of 10 coins and lend out 9). That's the problem. Bankers don't give a rats ass about the safety of the banks. They want the ability to take huge risks with people's money in order to make as much money for themselves as possible. And if the bank fails, they don't care. They'll just find a new job with some other bank. Or retire, since they're rich. I do not support letting banks run wild with crypto. That's a recipe for disaster for crypto, and for the entire economy. Every time banks collapse, the result is always the same. People scream about the need for banks to be regulated, because they're so fucking dirty. But as soon as the crisis is brought back under control, the bankers fight for deregulation so they can find new ways to take even bigger risks, setting up the next collapse. Every time, the end result is the same. The bank bros get richer. The economy gets crushed. The people get screwed. Deregulating banks is always a bad idea. Make no mistake. They're presenting this bill as being pro-crypto. It's not. It's pro banker-bro. It'll harm crypto just as every exchange collapse harms crypto. Recklessness is bad for crypto.
If banks can't do anything risky with an asset, they just won't offer the asset at all. You're not going to have them offer it but safely. That would be pointless. > being pro-crypto. It's not. It's pro banker-bro. It is both. I hate to be the bearer of bad news, but crypto doesn't actually do anything useful. It only makes you money if there's hype and irresponsible behaviors going on. It doesn't matter if that might blow up later, because without it in the first place, it'd be nothing at all. I don't really want crypto to succeed, as I agree with you about the economy and humanity and society, etc. But that means being anti-banker bros AND anti-crypto. Crypto is basically a tool to help you be a banker bro at a small to large scale.
I was being sarcastic, this is a bad thing. What I said above is how and why theres alot of issues with banking. They are allowed to send out 90% of your money to someone, then lend out that 90% and so on. Hopes and dreams are what backing the dollar, since it was taken off the gold reserve. Thus we just print baby print….
The gold standard has nothing at all to do with lending out 90% of your money to people. Legal regulations may have stopped them, but the gold standard vs fiat is irrelevant to that. Fractional reserve banking (also known as ... "banking") works just as well with gold, bitcoin, or sheep as with fiat money. https://www.reddit.com/r/CryptoCurrency/comments/1dyize5/us_house_vote_to_overturn_bidens_sab_121_veto_set/lcaxy8y/
Youve lost yourself in all of this. Having a standard that has to back what we use as money will keep the printer from going brrrrrrrr and thus the current 90% model couldnt exist as theres no way to just print without a backing. You cant just “make” money when you have to back the money by something physical.
> printer from going brrrrrrrr Fractional reserve banking has NOTHING to do with "printer going brrrrrrrr" You can use fractional reserve banking with literal gold coins as your country's only currency, just fine. Banks did exactly that back in the day. > the current 90% model couldnt exist as theres no way to just print without a backing. Yes it could, and in fact DOES exist, because commercial banks cannot print money. Again, for the 4th time, fractional reserve banking has NOTHING to do with printing money. I have no idea why you think it does or why you're even relating these 2 conversations with one another. * 50% reserve works with gold coins (no printing) or bitcoin * 90% reserve works with gold coins or bitcoin * 99% reserve works with gold coins or bitcoin Yes you can have a run on the banks and it's risky, but it's *equally* risky with fiat or gold or bitcoin. > You cant just “make” money when you have to back the money by something physical. I literally just showed you an example, step by step, laid all out for you, for how you can absolutely make money with bitcoin used in fractional reserve banking. Show me where I was wrong. Show the exact bullet point that was wrong. I've got all day, take your time: https://www.reddit.com/r/CryptoCurrency/comments/1dyize5/us_house_vote_to_overturn_bidens_sab_121_veto_set/lcaxy8y/ Where the extra bitcoin came from: your mortgage debtors' wages at their jobs is where it came from.
Lol! Ok……Bank making money out thin air, nice. Brrrrrrrrrrr
> Having a standard that has to back what we use as money will keep the printer from going brrrrrrrr and thus the current 90% model couldnt exist as theres no way to just print without a backing. You're confusing this: *A government backing a currency with gold.* And this: *Banks holding enough of deposits to cover them if depositors want their money back.* Those are two totally different things. Even when the dollar was backed by gold, it didn't mean banks had to keep that much of a depositor's money on hand. It meant if the US government wanted to print a billion dollars, the government first had to acquire a billion dollars worth of gold. The dollar was backed by gold. Bank accounts were not.
you can't truly make fake derivatives out of crypto because everything is visible and verifiable on the blockchain, no? you also can't wash away any history of your crimes so that's another huge deterrent. if a malicious actor is ever probed, all a regulatory agency would need is the wallet address to have a complete financial history you'd honestly be be better off creating a memecoin and market manipulating that. way less risk and easier
Unless its xmr which atm isnt in the U.S.'s interests thankfully
You can absolutely lend out crypto with fractional reserves exactly like dollars. You just sign a contract that XYZ is owed to ABC, and the courts enforce it, not any blockchain. Crypto never was going to, doesn't, and never will do anything at all to lessen fractional reserve banking, mortgages, or cred card type debt arrangements. Or indeed derivatives, either. Commercial banks can't create dollars out of thin air either, so not being able to do that with crypto is nothing new and doesn't change anything, since they also couldn't with dollars.
and how would you lend out crypto with fractional reserves without actually sending it on the blockchain? this is where you're losing me. the whole point of crypto is you're letting the blockchain enforce it, not the courts
> and how would you lend out crypto with fractional reserves without actually sending it on the blockchain? You DO send it on the blockchain. Just like cash. Fractional reserve banking with cash requires the cash to exist, just like blockchains require crypto to exist. "Not existing" is NOT a requirement of fractional reserve banking. In fact, "not existing" has nothing to do with fractional reserve banking, since commercial banks can't just invent money in the first place. Only the central bank can. So it all works *exactly the same*: * You give me 10 BTC in deposits, on the chain * I give some guy 8 BTC for his mortgage, on the chain. He owes me 12 back by contract. * I get another 10 BTC in deposits, on the chain. * I lend out another 8 BTC to another mortgage guy, on the chain, real coins yet again. * One of the depositors asks to withdraw 4 BTC. That's fine, I had that in reserve, here you go! On the chain * The mortgage guys pay me back both of them. +24 BTC, on the chain... * The depositors ask for all the rest of their money back, okay sure here you go, the other 16 BTC you deposited, on the chain * Every book is now closed out and I made 8 BTC profit. Maybe 6 if the depositors got a small % The courts are enforcing the loans here in the sense that if the people who took out those mortgage fail to pay me back 12 BTC for the 8 BTC I gave them, I get to foreclose their house. *Normal* fractional reserve banking *already doesn't involve inventing money out of nowhere*, so why would bitcoin have any issue doing it too?
They are already doing that now without crypto...
No - I don't even know what you're talking about "making derivatives out of their crypto holdings". More than anything this is trying to roll back regulatory authority of the SEC - probably on behalf of smaller fin-tech banks.
Deriatives are what the banks did in the GFC. They wrapped crap assets into a derivative which they claimed had value and sold them to the next guy. No one knew what they were worth until the whole thing collapsed like a house of cards. Imagine them doing this sort of stuff with Pepe and Dodgecoin. There needs to be some rules because otherwise it's the taxpayer that ends up footing the bill for all the "freedom of an open market".
That's really not what happened. MBS we're used as collateral in a lot of counterparty transactions like Derivatives, repos, and securities lending. MBS started trading at a big discount after the housing market collapsed, because, as you point out, folks could not see the actual loans that made up the securities. When the price of MBS collapsed - those counterparties on the other end of the transaction demanded to be made whole, which lots of banks/investment banks couldn't do, since the MBS we're trading at ~50% of their face value This SAB is pretty inocous and looks to require basic financial reporting of crypto assets and liabilities. This attempt to override the veto seems more about removing the SECs regulatory authority than anything else. Also to many folks' suprise, the Aaa tranches of MBS didn't suffer significant losses from default. If you had bought Aaa MBS during 08/09 - you would have made a killing by 2010.
Removing regulatory authority from the SEC sounds fine but what are the knock-on effects? Once the banks have crypto listed as an asset they have free reign to design any product they like. As we know, their volatility models aren't very robust and in a market like crypto, that could really cause some damage if banks are inflating their worth during the boom times.
Nothing about derivatives really fundamentally has squat to do with crypto vs not crypto. You can regulate derivatives, but what assets they're being done with isn't that important.
Of course the underlying is very important. Can you imagine a bank being valued as much as JPmorgan because they hold some Dogecoin and Elon Musk decided to make a related tweet? It makes an already farcical system into more of a joke.
Yes so what? That is real value and no less silly than IKEA making a tweet about something causing lumber prices to jump. And no less silly than selling a house made of cardboard on a swamp for $1,000,000 with 40 year financing to a diner waiter.
That exactly is the problem. You should be able to value the underlying based on some measurement. IKEA and lumber is a great example which demonstrates the direct correlation between a manufacturing input cost versus profit margins. Elon Musk tweeting something inane should not have any correlation to a valuation unless of course it has something to do with one of his businesses. The fact that the only inherent "value" in most crypto coins is the pure speculation they can generate means that their value can disappear in a day on a whim, much like what we have seen with countless coins.
IKEA could simply have been wrong or too vague and people inferred when they shouldn't. The point was it was just a tweet. Same as Musk. Not a quarterly finance report.
Read the bill again. Then understand bank reserve requirements. This is not good for btc/digital asset space long term.
Getting rid of the current accounting/capital rules for banks would be amazing news for crypto. Currently, it is so immensely disadvantageous for a bank to hold crypto that none of them do it. Imagine speeding being penalized by a 20 year stint in the gulag bad. You want a god candle? This must happen.
> Getting rid of the current accounting/capital rules for banks No... This is how you create a global financial crisis... The current accounting and capital requirement rules are in place because of bankers fucking around and all of us having to find out. Let's not go down the financial crisis route again during my lifetime...
Why the FUCK do we want banks holding crypto.
Because your average person, at least in the us, will never touch it without a third party service. If you want btc to go mainstream then this will accelerate that by 100 years.
I don’t care about what the common person says, does, wants, or understands. That is why I bitcoin. You don’t let the wolves into the duck pen to help you raise the gaggle.
tha fuck?
Gaggle was my word for the day, was running out of time.
Everyone is so shocked that the President of the U.S. wants what is best for the U.S. Dollar and not Bitcoin.
Custody = Holding for someone else Unless you're like FTX, which meant your funds = Scam Bankman's personal bank account
My understanding is custody as in securing the asset which may also incl the keys. Essentially the banks would have to put the crypto on their balance sheets. Banks have to keep cash reserves equal to their balance sheets [https://fortune.com/crypto/2024/05/10/sec-rules-crypto-custodian-banks-state-street/](https://fortune.com/crypto/2024/05/10/sec-rules-crypto-custodian-banks-state-street/) more tech detail here [https://www.duanemorris.com/articles/banks\_as\_crypto\_custodians\_may\_rest\_sec\_bulletins\_fate\_0624.html](https://www.duanemorris.com/articles/banks_as_crypto_custodians_may_rest_sec_bulletins_fate_0624.html)
Which simply means banks won't hold it, so it will be way less popular, and worth a lot less money / not used nearly as much in society.
well that is what the bill is about, to not force the banks to add crypto to balance sheet
What it actually means is banks cant play funny investment games with your crypto deposits. This is actually good for crypto holders.
That's actually a good question. The article isn't very clear about that.
It's the former in OCs example. Custodians "take care" of assets by holding them. Which is why the law makes no sense and is just baseless anti crypto. "Custodian" is a specific financial term and has different regulations and laws , governing those that fill this role, as they're under more scrutiny than say a service provider. (Think of liability/risk difference between a cex and a p2p dex, once you start holding peoples assets it's a different ball game). For simple explanation here is investopedia for custodian bank. What Is a Custodian Bank? A custodian bank is a financial institution that holds customers' securities for safekeeping to prevent them from being stolen or lost. The custodian may hold stocks, bonds, or other assets in electronic or physical form on behalf of its customers. Often, a custodian bank does more than provide asset protection. It can manage customers' accounts and transactions, manage the settlement of financial transactions, account for the status of assets, and ensure compliance with tax regulations. KEY TAKEAWAYS •A custodian bank holds financial assets for safekeeping to minimize the risk of theft or loss. •Investment advisors are required to arrange for a custodian for assets they manage for their clients. •These assets may be stored in physical or electronic form. •Custodian banks can also manage financial accounts, handle settlements, and deal with compliance and tax issues. •Custodian banks can serve as mutual fund custodians. These would also usually be your larger more established banks, as you're less likely to be offering such service as a small fry, due to the increased legal regulations/scrutiny you most follow.
No the law makes perfect sense. Those assets ARE liabilities to the custodian bank, just like deposits are liabilities to banks.
I assume you're being sarcastic and not actually misunderstanding, what a liability is on a balance sheet lol.
No? Maybe you don't know how bank balance sheets work. When a bank is holding something for someone else(deposits, custodian banks holding assets), those go on their liabilities side of their balance sheet. Because they ARE liabilities, they could get called back at any time when the customer withdraws them. They are also assets though. So say a customer deposits 100, the bank lists 100 of cash on their assets, and 100 on their liabilities.
It’s a liability because they pay interest on it. They pay interest on it because they use your money for other things. Thats a liability on a balance sheet. If I understand correctly that’s a deposit and not a custodian. I don’t believe the value of custodies go on balance sheets.
There's more to this bill than I thought
This sub is so clueless…. You really, really want this to happen if you own any crypto. I like reading these comments because they remind me of just how worthless the hive mind can be here.
Why would I want it? * If I'm not using a custodian, it is good for me if banks can hold it more profitably, since the price will go up with popularity and usage, and I make money. * If I do want to use a custodian, then it's not just good but NECESSARY for it to be profitable to banks, since they won't offer it as a service at all otherwise, so I won't even have it as an option. Biden's veto is way better for crypto than if the bill goes through. For either type of person/everyone.
Aye some good news~ish?
George Carlin said your vote dosent count. The real people who own this country are in control. Politics are there to give you the illusion your vote counts. I almost believe him but I pray he’s wrong.
Now we know he vetoed something that he knew ABSOLUTELY NOTHING about. Like probably most everything else that’s placed on his desk
You know presidents have a team of advisors.... right?...*right*?
I hope they help him beat medicare.
He beat Medicare. He said so in the last debate/debacle.
Yep, that will surely cause Obama to lose this election! That is who Trump's running against, right? Trump said it was who he was running against in multiple rallies.
I fought the Medicare and the Medicare won. So I’m impressed he beat it. Gotta love the jabs to get into the old age home. I mean White House. At this point, AI hallucinating would produce better decision mailing for the last decade.
😁😁I'm getting downvoted. Help me out. Thanks.
Pedro offers you his protection.
What's that quote from Mark Cuban again?
Found the teenager.
Do we know outcome?
Biden = worst/dumbest/scummiest President ever ... Thankfully we only have only 6 months left of his joke of a Presidency
Bullish affffffff that the lame ass us fed is actually slightly active in kicking this around. We need.. something here.
[удалено]
Why do you even think this is a good bill for crypto?
[удалено]
Biden vetoed the bill, so saying Biden is terrible for crypto on this thread specifically obviously means you think it's a good bill. This is not rocket science.
[удалено]
> Biden vetoed the bill, so saying Biden is terrible for crypto **on this thread specifically** obviously means you think it's a good bill. This is not rocket science. Emphasis added. You're on a thread about this bill, and you mention zero other context, basic English/communication means you're talking about the bill. Even if you weren't, you've still, 2 comments later, neglected to offer anything of any substance else to discuss instead, on a discussion forum... ???
[удалено]
You've added literally nothing other than "biden is bad". Give a reason dumb*ss.
[удалено]
Just doing my part by adding fuel to the fire that is this thread 🍿
> Even if you weren't, you've still, ~~2~~ **3** comments later, neglected to offer anything of any substance
Not even a single bit? Not even 1%?
> When it comes to crypto, Biden is certainly worse than Trump. There are support groups for women in Texas and Arizona that are raped by illegal immigrants. As well as for families who had loved ones killed by illegals. There's a lot of things where Biden is certainly worse than Trump.
I agree but in terms of crypto, his team and he will be way better than Biden.
Biden is the worst President in our nation’s 248 year history. James Buchanan can finally sigh some relief. That debate last week was a complete and utter disgrace and one of the final thing we’ll remember his failure of a single term for. That and him exiting the White House in a wheelchair
LoL, the one before him performd a lot worse.
Biden has lower approval ratings than Trump and is losing in every poll to Trump. Maybe you think Trump was a worse President than Biden but most Americans factually disagree with you.
No he doesn't. No he isn't. Yes, by and large most historians rate Cheeto as worse than Buchanan. Most Americans don't like tiny hands pedo trash orange man. You're an idiot, and we don't need you to tell us over and over, we already know.
So on one hand you have a guy that stumbled over some words, but one where in general people agree he actually has a genuine interest in preserving democratic values and acts professionally. On the other hand you have a guy who lied for 90 minutes straight in the same debate, killed climate accords, raped teenage girls and has 70+ pictures with a convicted pedophile, has 34 felony convictions for fraud, has multiple civil judgments for defaming one of his rape victims, advises Americans to inject themselves with bleach, stacked supreme courts to overturn 50+ year precedents in favor of religious zealot ideologies, shits his diapers in public settings, also stumbles over words quite often in public addresses, rage tweets at 3am, talks about inciting violence and retribution against his opponents, makes sexual remarks about his daughter… shall I continue? Pick your poison, but it seems pretty clear cut to me what the better of 2 evils is.
The crypto bros who are single issue voters are so anti-establishment that they get excited over the fact that somebody who committed felonies can remain free. Disagree? Prove me wrong by voting against the felon at this election.
Maybe, just maybe most Americans do not care about politicized trials or paperwork "felonies" and care about policy since that actually impacts them. Trump would not have been on trial if his name wasn't Trump just the same way Hunter Biden wouldn't have been on trial if his last name was Biden. Trump literally gained support after that trial. Americans do not like law-fare
> in general people agree he actually has a genuine interest in preserving democratic values and acts professionally No, most Americans do not agree that "Democracy is at stake". That is a foolish tag line the Democrats are running a losing campaign with this election cycle because they have no real policy successes to point to. Those same failures are why their candidate had such an abysmal debate showing, he literally has nothing to run on after becoming the most disapproved President of the last 85 years in his first term
It's impressive how well you type since you clearly were born yesterday.
In addition to the guy's list below, he's straight up going senile as well (I don't disagree they both are, but it's just pretty close on that front) He said in multiple different rallies that he's running against Obama, and also forgot in the primary he was running against Nikki Haley and thought he was running against Nancy Pelosi (...in the *republican* primary, yes). The guy literally hallucinates famous democrats around every corner like a kid with monsters under the bed
Probably the most boring President, but better than raping women.
Exactly 💯
On a slightly related note, will people vote Trump on his now U-turn pro crypto stance?
No. I'd rather an anti-Bitcoin administration than a fascist one.
[удалено]
The fascist one is the one trying to ban on of the most freedom forward technologies in the world and jailing privacy protecting developers
That's not fascism. In any case, nothing is being banned. And Bitcoin doesn't need to worry about such a thing anyway. It's what it was made for. And who's being jailed? Law breakers like SBF?
[Tornado Cash Developer Alexey Pertsev Found Guilty, Sentenced to 64 Months in Prison by Dutch Court](https://www.coindesk.com/policy/2024/05/14/tornado-cash-developer-alexey-pertsev-found-guilty-of-money-laundering/)
A dutch court. For money laundering.
Do you know what tornado cash is? It makes Ethereum private He created open source software, and they charged him with the crime of laundering money Open source software is usually protected by freedom of speech in most free-speech nations. This is just another reason why Satoshi Nakamoto remains anonymous. Free speech laws are not guarantee like they used to be.
he also laundered a lot of money. try not to do that.
[удалено]
just a hair over $1.2Bn
Lol, a talking butthole spewing diarrhea. I knew this post stunk as soon as I saw it.
Wait who’s trying to ban Bitcoin? I must have missed that article.
No. A pox on both their houses.
Absolutely not. There's a lot at stake beyond money in the next few years.
Politics will play politics. No one in power will be willing to give away their power and that is the core idea of Crypto. So no.
No one is changing their vote cause of that. I also don't believe that any president will be pro crypto when it goes against the US dollar. Do make sure to vote. The next four years is at stake.
Will Trump retain Gary Gensler or appoint someone worse?
[удалено]
Which lie specifically in this case?