Wall Street and London Look to Cryptocurrency for Longer-Term Projects
Reality is often more surrealistic than fiction. On Nov. 30, FTX chief fraudster Sam Bankman-Fried was featured in the New York Times’ annual Dealbook Summit, a major “financial analytical” event, along with Volodymyr Zelensky, Mark Zuckerberg, Treasury Secretary Janet Yellen and BlackRock CEO Larry Fink. The composition of the panel is weird in itself, but then again we are used to seeing Zelensky used like parsley: good for any and all dishes.
Although the participation of Bankman-Fried was announced before his bankruptcy and investigation for fraud, one would have expected the New York Times to have the decency to disinvite him. Instead, he was given a “tough” interview there by the daily’s Andrew Ross-Sorkin. This is somewhat like having Captain Francesco Schettino, after crashing the Costa Concordia cruiser near the rocks of Elba, join a podium discussion on modern navigation technologies…
But back to cryptocurrencies. Although the real identity of the person who invented them namely Bitcoin developer Satoshi Nakamoto, is unknown, it is no secret that one year before he appeared, discussions about a digital currency using blockchain technology had begun at the Bank of England. Pilot projects about a central bank digital currency (CBDC) are now being carried out by the ECB, the Bank of England, the Federal Reserve and other central banks. At the yearly central bank meeting at Jackson Hole in 2019, then Bank of England governor Mark Carney called for a “global, synthetic digital currency managed by central banks” for the purpose of fingertip control of inflation and deflation (economic austerity).
In such ominous schemes, Sam Bankman-Fried, founder and CEO of the cryptocurrency exchange FTX, may still serve as a useful instrument of the financial oligarchy. Thus, there is a renewed push in the lame-duck session of Congress for cryptocurrency regulation legislation lobbied for, and originally designed by, Bankman-Fried, who gave $23,000 contributions to each of its prime sponsors. The relevant bill has been recommended publicly by SEC chair Gary Gensler, and by the Financial Stability Oversight Council (FSOC) of the top five U.S. financial regulators. It would give powers to regulate cryptocurrency operations to the Commodity Futures Trading Commission (CFTC) and not Gensler’s SEC. The main point, however, is that cryptocurrency would then be embraced and “regulated” under the FSOC with the Federal Reserve at the top. (Recall that last April at the Economic Club of Washington, Federal Reserve chair Jerome Powell said that if there’s to be private money creation in the United States, the Fed should play a role.)
This is a big departure from the solid Congressional opposition five years ago to Facebook’s attempt to launch the Libra “private global currency”. For one thing, it is becoming clear that cryptocurrency blowouts, at the most extremely leveraged end of the financial world, can “contagion” into the likes of gargantuan BlackRock, Inc., which is starting to show signs of difficulty.