With global sanctions hitting Putin-aligned Russian oligarchs and their troves of ill-gotten gains, there's been speculation that these billionaires will hide their assets in cryptocurrency -- a suspicion perhaps heightened by the fact that some crypto firms are refusing to shut down access by Russians to their exchange platforms.
How realistic a concern is this, and how should governments respond? I put those questions to Bill Maurer, Director at the Institute for Money, Technology and Financial Inclusion at UC Irvine, and one of the world's foremost experts on alternative/experimental forms of money and finance:
"If you look at real-time transactions right now on fiatleak, you'll see that most of the trading between rubles and crypto is to Tether, a stablecoin that markets itself as fully backed by US dollars," he tells me. "That would represent a flight to stability, in contrast to, say, buying Bitcoin. It's also interesting since there's been a lot of speculation about what the war will do to the price of Bitcoin -- and my answer is, within the current pattern of trading, probably not much.
"Tether, meanwhile, is controlled by Bitfinex, a company that has moved around from tax haven to tax haven (from the British Virgin Islands to Switzerland), with questions about whether the reserves actually exist and where the reserves are really held. Pity the poor oligarch who is drawn to a stablecoin whose value may be based on nothing but thin air. Not."
The problem for oligarchs, he goes on, is that moving their fiat money to crypto means they'll have to keep it as crypto:
In a Virtual World Economy, User-Generated Content Prices Are Controlled by the Company, Not the Market (Comment of the Week)
Really interesting conversation on the problem of virtual currency in virtual economies last week kicked off by "Kyz", who explained how difficult it was for them to reliably run a successful business in a virtual world. Replying to the idea that the value of their content is decided by the market, Kyz goes deeper into the analysis:
The last part isn't quite accurate but the full story enhances Kyz's argument: Linden Lab reportedly made an offer to the user-made Gaming Open Market, which circa 2004/2005 was a popular platform for the community, then in late 2005, officially productized the Linden Dollar through the launch of the LindeX.
"I mean, I get it," Kyz goes on. "And if I ran a virtual world, creating an extra revenue stream from currency is something I wouldn't lightly ignore." But for content creators like Kyz trying to monetize on the platform, this led to additional hurdles and regulations:
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Posted on Monday, September 13, 2021 at 01:31 PM in Comment of the Week, Linden Lab News & Analysis, Virtual Currency | Permalink | Comments (3)
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