Cryptocurrency has achieved some popularity in the Middle East, but the FTX debacle has spurred concern about legitimizing a currency which, traditionally, has spurned such calls as unnecessary. Here’s one call for crypto regulation in the Middle East, detailed by Cointelgraph:
A new blockchain and cryptocurrency-focused association has been launched within Abu Dhabi’s free economic zone that aims to further the development of blockchain and crypto ecosystems across the Middle Eastern, North Africa, and Asian regions.
The Middle East, Africa & Asia Crypto & Blockchain Association (MEAACBA) was officially launched on Nov. 8 in the Abu Dhabi Global Market (ADGM), a free economic zone based in the center of the city subject to its own set of civil and commercial laws. The zone was designed to further the growth of fintech companies in the United Arab Emirates (UAE).
The nonprofit organization will aim to facilitate regulatory solutions, create commercial opportunities and invest in education to support industry growth, according to its website.
It’s one thing to see users finding new uses for a project unenvisioned by the project creators/sustainers. It’s a bit of a ephemeral boost to the ego.
But it’s quite another to see organizations forming to build exactly what the creators were trying to avoid: government oversight and manipulation. But this is not happening just in the Middle East:
Behind the scenes, top Treasury officials have been in close contact with major cryptocurrency exchanges and other companies in recent days to assess the FTX fallout, according to an aide who spoke on the condition of anonymity to describe the conversations. Some lawmakers, meanwhile, signaled they were exploring a raft of new proposals in the hopes of protecting Americans who buy, own and sell cryptocurrency.
Sen. Ron Wyden (D-Ore.), a tech expert and leader of the tax-focused Senate Finance Committee, said in an interview that he planned to put forward a “consumer protection package” targeting cryptocurrency in the coming days. The lawmaker worked with other Democrats and Republicans last year in instituting the first-ever tax reporting requirements for digital tokens.
Sen. Mark R. Warner (D-Va.) said this week he had “tried to reserve judgment” given the promise of the technology. But the lawmaker, another top member of the Banking Committee, stressed “there’s a reason we have rules around investor and consumer protection, safety and soundness, and the prevention of financial crime.”
As she left the Tuesday banking hearing, Sen. Cynthia M. Lummis (R-Wyo.) similarly stressed that the FTX meltdown left Congress no choice but to legislate. Lummis, who once took to the Senate floor to “thank god for bitcoin,” has put forward her own, sweeping bill that would shift more oversight to the CFTC.
“I think it’s really important now that senators really focus on digital assets,” she said. “In the past, it’s been easy to put that on the back burner and address other issues that were more front-burner issues. This is now a front-burner issue. … We have put ourselves at a regulatory disadvantage.” [WaPo]
While it’s true that some people are being financial hurt, I have to wonder if, rather than safe-guarding people from digital embezzlement, it should be allowed to occur. Oh, sure, make it illegal and track down the malefactors if you can, but keep in mind that cryptocurrencies do not reach out and force people to use them.
Instead, it’s entirely voluntary.
It’s a chance for people to learn, through the most effective mechanism available, i.e., loss, that the digital wild is dangerous. It gives them a chance to develop analytical skills that will apply not only online, but throughout life.
And it’s a good opportunity for it because, so far as I can see, crypto does not supply a unique and necessary service to the economy. Instead, it aims to supplant normal currency (known a couple of hundred years ago as fiat money) with a currency (again, fiat money) which may, or may not, be operationally more efficient, but appears to also optimize opportunities for grifting, ransomware, outright embezzlement and theft, and other digitally-based crimes, all while its supposed advantage of lack of manipulation has its own downside.
Think of it as a kiddy pool for teaching kids how to swim, using the venerable toss them in and watch them sink philosophy.
