Snippings

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“While the government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings.”

Earlier on Wednesday, Salvadoran Finance Minister Alejandro Zelaya said the Central America country had sought technical assistance from the Bank as it seeks to use bitcoin as a parallel legal tender alongside the U.S. dollar.

From World Bank rejects El Salvador request for help on bitcoin implementation | Reuters:

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Real data is messy and riddled with bias. New data privacy regulations make it hard to collect. By contrast, synthetic data is pristine and can be used to build more diverse data sets. You can produce perfectly labeled faces, say, of different ages, shapes, and ethnicities to build a face-detection system that works across populations.

From These creepy fake humans herald a new age in AI | MIT Technology Review:

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In contrast to many technology companies that think about regulatory risk, fintechs have to think about regulatory opportunity.

From The Future of Fintech is Regtech | PaymentsJournal:

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Net balances were also similar whether or not the user had a bank account.

From How Do Kenyans Really Use M-PESA?.

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Bitcoin investors seem to be relying on the greater fool theory — all you need to profit from an investment is to find someone willing to buy the asset at an even higher price.

From Opinion | Bitcoin’s Many Flaws – The New York Times:

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I strongly agree with the CEO of Banking Circle, Anders la Cour, who recently said that RtP is a “a very rational way for regulators to look at how payments should be done” and, as goes on to point out, if the banks adopt it then it will provide a safe and (just as important) convenient way for companies to collect money.

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That doesn’t mean it’s completely smooth sailing; BNPL critics say the payment plan encourages people to splurge on things they can’t afford, and has less protections than a traditional credit card. Earlier this year, the UK government announced it will regulate BNPL schemes, making affordability checks on consumers mandatory.

From Here’s what payments will look like, post-pandemic | Sifted:

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The new “Bitcoin Law” in El Salvador is misleadingly labelled by many observers as a “legal tender” law, but it is no such thing. Legal tender is an outdated a largely meaningless concept that relates to the narrow technical matter of discharging debts. It is not about forcing merchants, people or indeed governments to accept any particular form of tender.

If we use America as an example then, we see in section 31 U.S.C. 5103 “Legal tender” that “United States coins and currency [including Federal reserve notes and circulating notes of Federal reserve banks and national banks] are legal tender for all debts, public charges, taxes, and dues”. Here is chapter and verse from The Fed commenting on what this statement actually means:

This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.

So let’s ask an interesting question than: would a U.S. central bank digital currency (e$, for short) become legal tender in the future? Here, I think the answer is unequivocal: yes, and in unlimited amounts, because there is no credit risk or counterfeiting risk attached. Hence I am confident in predicting that a transfer of e$ will be considered legal tender and discharge all debts, public charges, taxes and dues. In time, Section 31 U.S.C. 5013 will undoubtedly be extended to say so.

But so what? The physical dollar is legal tender in the U.S. right now just as the physical pound is legal tender in the U.K. right now and plenty of retailers won’t take it. That’s because legal tender laws do not force people to incur debts: you cannot force a merchant to sell you goods for dollars. The merchant is free to accept Bitcoin only if they so want.

 

 is no federal law that forces people to accept dollars as it is, which is why you see municipalities passing local ordinances to force retailers to accept cash. (These ordinances are, by the way, a bad idea but that’s a story for another day.)

Would the U.S. amend legal tender law to go as far as China and force merchants to accept a CBDC? I doubt it. Would the Fed declare any digital currency that meets regulatory approval to be legal tender and retailers will have to accept both physical dollars and digital dollars? It seems unlikely. Would the US accept CBDC for the payment of tax? Actually, that day might not be so far away, as far I as am concerned what is or isn’t accepted for the payment of taxes is a much better measure of what is or isn’t a currency than outdated concepts of legal tender!

 

 

Art. 7. Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service.

From El Salvador’s Bitcoin Law: Full English Text | by Avik Roy | Jun, 2021 | FREOPP.org:

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Jack Mallers, CEO of Zap, who runs Strike, describes Tether as “a synthetic digital dollar” on your smart phone. With the minor issue that tethers are absolutely not dollars.

Here’s Mallers explaining how it works: [Medium]

Let’s walk through a user story. I want to send $1,000 to a friend of mine in El Salvador:

• When I initiate the $1,000 payment, Strike debits my existing USD balance.
• Strike then automatically converts my $1,000 to bitcoins ready for use in its infrastructure using its real-time automated risk management and trading infrastructure.
• Strike then moves the bitcoins across the Gulf of Mexico where it arrives in our Central American infrastructure in less than a second and for no cost.
• Strike then takes the bitcoins and automatically converts them back into USDT (synthetic digital dollar known as Tether) using its real-time automated risk management and trading infrastructure.
• Strike then credits the existing user with the USDT to their Strike account.

From El Salvador passes its Bitcoin Law — and it’s a Tether scam – Attack of the 50 Foot Blockchain:

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