It’s Time for Regulators to Put Crypto Down
The bank run is burnt into the collective U.S. imagination for good reason. When the Great Depression hit, the savings of millions of Americans were wiped out when their banks collapsed. That’s why the Federal Deposit Insurance Corp. (FDIC) was introduced in 1933. Since then, not a penny of FDIC-insured funds has been lost when banks go under.
It’s a different story when your “bank” is a cryptocurrency firm. As crypto prices collapse, customers’ deposits are disappearing with them—or being swiped by the people behind the company. Unregulated markets are looking very much the same now as they did in the 1920s.
Bitcoin advocates have largely switched away from claiming that the cryptocurrency can function as an actual currency, mainly due to it still being largely unfeasible to pay for anything in it. Now the claim is that bitcoin is a “store of value”—that is, an asset that won’t lose its worth over time. This has been dramatically shown untrue. More than that, the storekeepers were shoveling the valuables into their own—U.S. dollar-denominated—vaults.
The bank run is burnt into the collective U.S. imagination for good reason. When the Great Depression hit, the savings of millions of Americans were wiped out when their banks collapsed. That’s why the Federal Deposit Insurance Corp. (FDIC) was introduced in 1933. Since then, not a penny of FDIC-insured funds has been lost when banks go under.
