Posted 7 months ago | by Ben Armstrong
EU Regulators Want to Control Crypto Markets – Insanity Abounds!!!
The European Commission wants to have a lot more control over crypto. Documents that were leaked recently show that the EC is looking for ways to have more influence over the token markets, which likely isn't going to be possible at the level it wishes.
Much in the same way that numerous parts of the US government are searching for ways to invade decentralized blockchains – the EC wants to be able to regulate the crypto markets like it would a stock or bond market.
According to the leaked report, the EC would put the European Banking Authority (EBA) in charge of crypto regulations, and would ask that the EBA limit volatility in the markets – and keep an eye on new tokens like Libra.
Seems Like a Tall Order
One wonders if the EC is aware of how Bitcoin works, and what would be involved in limiting how much markets moved. There is no central issuing authority that can create or remove BTC liquidity from the marketplace, which puts the technocrats in a bind.
For platforms that are more like a digital currency, not a decentralized one, like Libra, there is no doubt that the EBA could enforce regulations. Libra's parent company will do whatever it takes to enter one of the world's largest economic areas, although people may not be so excited about using Facebook money.
For the decentralized crypto world, the EC is likely to hit a wall. The only way that it could hope to control market moves is by first buying large amounts of whatever token it wanted to influence, and then selling it when the time is right to move the market.
Central Banks Have a Bad Track Record
If in fact the EC actually goes ahead with a plan that would include massive purchases of crypto (they would have to buy a lot), the risks that would be created are manifold.
One of the biggest risks that would be created is another 'Breaking the Bank of England' scenario, as the EC's market makers would be limited by the amount of crypto it has to sell in the marketplace.
There is no way to know how speculators would exploit the central planners – but given the ire that exists in the crypto community for fiat currency – the raids on central banks would likely happen often.
Given the fact that the EC simply can't regulate many of the largest crypto exchanges – the kinds of tricks that crypto whales could play via both actual market activities – and the futures markets would leave the central planners chasing their tails as they hemorrhaged funds into the markets.
Have a listen to us EC – humiliation lies in this direction – and the more control that is desired – the larger the constant humiliations will become.
A Ban Won't Work Either
Of course, if the EC can't manipulate the crypto markets – it may move to ban decentralized tokens outright.
A move to ban decentralized tokens from the European market would likely prove disastrous – as many people across the West are using crypto as a way to offset inflationary risks that have been created in the past decade by central banks and governments.
Governments may need to accept that central planning and EZ money may work when times are good – but when the economy is actually in danger – the only way out is sound money and creating value.
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