Ryan Clements is an assistant professor and chair in business law and regulation at the University of Calgarymore than 20,000 kinds of cryptocurrency in the world. This goes against one of the central ideas of Bitcoin—the very first cryptocurrency—which promised a cap on supply. Crypto was supposed to be many things: a kind of “digital gold,” something that you put money into when there’s turbulence; a store of value; and a medium of exchange with a decentralized financial system.
One example of this lack of oversight is the case of Anchor, a lending-and-borrowing protocol from the creators of the cryptocurrency Terra. At one point, Anchor was offering investors 20 per cent interest justsible when traditional banks were paying customers close to nothing? This is exactly the kind of behaviour that led to the spring crash: Anchor failed, and Terra’s Luna token collapsed—plummeting from US$80 per token to less than US$1.
In order for crypto to become a part of most Canadians’ lives—to get that 14 per cent up to 90—it has to play a function other than simply sliding up and down. Otherwise, people could just watch the stock market, where it’s easier to invest and the value of your assets is more transparent. Crypto investors need to be able to use it in ways that have been discussed but not fully realized, like getting a business loan or transferring money safely across the world.
Second, the federal and provincial governments may need to enact legislative solutions that bring the DeFi system under the supervision of the securities regulator. In the United States, the SEC has recently proposed steps to regulate certain DeFi exchanges; it’s possible to do that in Canada, too. Promotion needs to be regulated, too. A bunch of investors got into crypto just because Matt Damon told them to be brave. People need to understand that cryptocurrencies are not the same as money.
ryanjclements UCalgary Ahh yes de-regulated currency needs better regulation. Does it also need more supply?
ryanjclements UCalgary Yes, it crashed. But... How about the 2nd crash?
ryanjclements UCalgary Crypto bros are the WORST.
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