Exploring transformation of value in the digital age

By Michael J. Casey, Chief Content Officer

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At CoinDesk, this week is significant for two reasons: One, we’re celebrating our 10-year anniversary; and two, we’re reflecting on the annual Consensus festival that we put on last week, which was a unique, important, agenda-setting event. 

One factor making Consensus so important this year was the sense that U.S. policy making around this industry had reached an inflection point. Regulation was the main topic of the conference. This week’s column puts a different spin on that much-discussed matter. 

For this week’s Money Reimagined podcast, my co-host Sheila Warren and I riff on the results of a survey that CoinDesk and Sheila’s organization, the Crypto Council for Innovation, put to attendees. It too showed in no uncertain terms that regulation is the issue topmost in people’s minds. 

The Need for Clarity in Washington – Not Just on Crypto

(Kevin Dietsch/Staff/GrettyImages/PhotoMosh)

So, will the Federal Reserve raise rates again at its next meeting? Maybe. Maybe not. 

The ambiguous messaging from this week’s meeting of the Federal Open Market Committee, with a statement from the committee and commentary from Powell that hinted at a monetary softening but was far from definitive, was frustrating for markets. But it was par for the course in the modern art of central bank policy-setting. 

I see these moments, in which markets must dissect the cryptic signals of these 12 people to figure out what price to pay for financial assets, as a reminder that our economic lives hinge on the decisions of small groups of fallible humans. That’s an interesting situation for an AI age in which we are surrounded by digital technologies that can review, interpret and program responses to massive amounts of data in seconds. Now, more than ever, we should be demanding more clarity and transparency in policy-setting. 

That all probably sounds like I’m laying up a “trust in the math” argument to replace our flawed human institutions with predictable, decentralized, censorship-resistant cryptographic monetary systems such as Bitcoin’s. But I actually believe the sheer complexity of our global economy – made up of human beings with different needs, political views, incomes, wealth and debt scenarios – demands some flexibility and at least a certain degree of unpredictability in policy making. 

Nonetheless, given the repeated central banking failures of the past few crisis-wracked decades – not to mention all the mistakes made by our elected officials and regulators – we should demand that our leaders enable some of these new tools to guide their and our decisions. 

There’s a wealth of valuable data in blockchains that shed a light on human behavior. There are cryptographic verification systems such as proofs-of-reserves that could provide real-time confidence in the liquidity of banks and other vital institutions. With hedge funds and other market heavyweights deploying powerful artificial intelligence tools to out-run all other market participants, policymakers are going to need powerful analytical tools of their own.

Instead, officials are increasingly reverting to opacity, deliberate ambiguity and equivocation. And this tendency toward the opaque isn’t just for central bankers. 

Consider the now famous exchange between the Chairman of the House Financial Services Committee, Rep. Patrick McHenry (R-N.C.) and Securities and Exchange Commission Chair Gary Gensler’s during the latter’s appearance before the committee two weeks ago. 

Gensler was between a rock and a hard place. Much like Jerome Powell, he had to equivocate because a pronouncement either way would trigger a mass over-reaction in either direction in crypto markets. But McHenry is still right: the crypto industry deserves much more clarity from its regulators. 

Regulators and policymakers like Gensler and Powell have to operate within a broken political environment, one marked by the lowest trust ratings in history for government. Their own lack of clarity is a survival mechanism for grappling with this wider uncertainty and malaise. 

Blockchain and crypto tools might be helpful to cut through all that BS. But alas, the U.S. government is currently quashing that technology rather than supporting it. 

Off the Charts: CoinDesk and BTC

Ten years of crypto coverage at CoinDesk. What a ride it has been.

To celebrate, we’re publishing a series of 10 articles over the rest of this month, each reflecting on the importance of a particular newsworthy event in crypto history. 

What better to represent these stories than to plot them on that most iconic of price charts: Bitcoin’s. 

The Conversation: Punxsutawney Powell

One Scottish bitcoiner’s response to this week’s Fed decision. Worth a watch:

Relevant Reads:  Consensus 2023

There was soooo much content out of Consensus that it’s impossible to do the event justice here. But, in case you missed it, here’s a sampling of some of the bigger moments, as captured by CoinDesk’s reporters. Full coverage can be found here.

Thanks for reading the entire newsletter. Here’s a reward!

Each week, we give our loyal Money Reimagined readers the opportunity to claim DESK, our social token, which is a mechanism for returning the value of engagement directly to the users who create it. 

Money Reimagined: A newsletter from CoinDesk

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