Wait, What?
Over the past several years, I have written about the U.S. economic system and how we, as taxpayers, have been paying a private corporation, The Federal Reserve, interest on an original loan since 1913. Currently, the American taxpayer, not the U.S. Government, is responsible for paying back $36 trillion. Further, according to the Congressional Budget Office, interest payments are projected to total around $78 trillion over the next 30 years. By 2054, interest costs would account for 34% of all federal revenues and become the most significant "program" next to Social Security and Medicare over the next few decades.
To grasp the totality of control the FED has, I created a detailed article in 2022 to explore the history of this system (click here for blog). To sum up, The article examines the relationship between traditional banking, cryptocurrency, and financial control.
WiFi to DeFi
As a result, it explains how NFTs and cryptocurrencies operate on blockchain technology. In addition, it contrasts the decentralized nature of crypto (DeFi) with traditional banking systems protected by FDIC and NCUA.
The text delves into the history of the Federal Reserve, established in 1913 through the Federal Reserve Act (FRA), which transferred money-creation power from Congress to private bankers.
Meanwhile, it discusses how the Federal Reserve operates independently from government control. Finally, it concludes by examining the emergence of cryptocurrency as a potential alternative to centralized banking, highlighting its benefits of eliminating intermediaries and its risks, such as the lack of protection against hacking.
Meet the New Boss
Likewise, In 2023, I wrote about a massive event in cryptocurrency and the growth of a new monetary system (click here for blog). In summation, I was exploring cryptocurrency and decentralized finance (DeFi), emphasizing how these systems eliminate middlemen like banks (FED), reducing fees and empowering users with complete control over their finances. In addition, my blog also examined the dominance of credit cards related to consumer debt, with significant profits for major financial institutions.
Meanwhile, I examined the downfall of FTX and Sam Bankman-Fried; the narrative explored the risks and failures of corporate control in crypto markets. Subsequently, the blog foreshadows a future push for regulated, federally backed cryptocurrency, encouraging readers to stay informed and make conscious financial decisions.
Currently, there is no federally backed cryptocurrency in the United States. However, the Federal Reserve is researching the potential of creating a Central Bank Digital Currency (CBDC), which could be considered a federally backed digital currency.
Trust me
Okay, so here we are today, Friday the 13th, in December of 2024, and we have feelings about cryptocurrency and our beloved U.S. dollar. The information I have provided will give you a clear understanding of the term, control. Money is in itself just an agreement. To clarify, the definition of money is a thing accepted by general consent as a medium of economic exchange. So, if I owned a bank and you wanted a loan, you would believe I had the money to lend you. On the contrary, as of March 2020, the Federal Reserve has set the reserve requirement to zero for most deposits, meaning banks technically don't need to hold any cash reserves against deposits.
If you are unclear about the definition of cash reserve, here is a refresher: Cash reserves against deposits" means the amount of readily available cash a bank is required to hold, as a percentage of the total deposits it receives from customers, to ensure they can meet withdrawal requests and remain solvent in case of sudden demand for cash; essentially, it's the "safety net" of liquid funds a bank must keep on hand to cover potential withdrawals.
One bullet approach
As a result, this got me thinking about the word "trust" and the term Federal Reserve Note, all of which I wrote about in the two articles I linked above. We trust a system running our nation's economy for about 111 years. Why is it so hard to either buy or trust crypto? Let's go back to Sam Bankman Fried and FTX.
Firstly, Sam Bankman Fried is now serving 25 years and forfeited $11 billion on March 28, 2024, for obstructed justice. Consequently, these funds will go through legal proceedings, with bankruptcy courts and regulatory agencies overseeing the restitution process to ensure fair allocation among the affected parties. The preferred shareholders will be the first to receive compensation from the bankruptcy. Who are the top shareholders? According to CNBC, Sequoia Capital (worth $10.58 billion), Thoma Bravo (worth $10.2 billion), Temasek (worth $389 billion), and SoftBank ($89 billion) are the first in line to receive a refund.
So, why would you be identified as a threat to crypto consumers if you are the third-largest cryptocurrency exchange, trailing only Binance and Coinbase? In other words, FTX handled approximately 10% of global cryptocurrency trading volumes, reflecting its significant role in the crypto market. Yet, its competitors, Binance and Coinbase, are thriving with substantial financial gains in 2024.
Are you a member?
Binance has reported revenues of $16.8 billion, marking a 40% increase from the previous year. The platform's annual crypto exchange volume was $3.4 trillion in 2023, a decrease from $9.5 trillion in 2021. In 2024, Binance has maintained its leadership position, with user fund inflows totaling $21.6 billion to date, surpassing the combined inflows of the following ten exchanges by 36%.
Meanwhile, Coinbase reported total revenue of $1.2 billion, a 17% decline from the previous quarter. Transaction revenue stood at $573 million, down 27% quarter-over-quarter, with total trading volume at $185 billion, an 18% decrease. Despite these declines, Coinbase achieved a net income of $75 million, reversing a loss from the prior year, and marked its seventh consecutive quarter of growth at $449 million.
Is it safe, yet?
The crypto business looks healthy. Most importantly, the total cryptocurrency market capitalization is approximately $1.7 trillion, with Bitcoin dominating around 50% of this value. Ethereum remains the second-largest cryptocurrency, making up about 17% of the total market cap. Moreover, major institutional adoption and regulatory developments continue to influence market dynamics. As a result, the market is seeing growing integration with traditional financial systems through various ETFs and institutional investment products.
So, how does this compare to the U.S. Dollar? The Dollar is the world's primary reserve currency and maintains its dominant position in global markets. As of December 2024, the Dollar stands at approximately $20.7 trillion. For comparison, the difference is a 1,118% increase over crypto.
The Federal Reserve continues to manage this money supply through various monetary policy tools, though there is increasing discussion about the impact of digital currencies on traditional fiat systems. What is a fiat system? A government-issued currency that has no commodity such as gold backing it. Consequently, Fiat money gives central banks (FED) greater control over the economy because they can control how much money to print.
Read it, and weep
One last thing: Sam Bankman Fried, the man who made cryptocurrency & trading an easy and effective means of wealth creation, is no longer part of the new money movement. Let's look at his last name: Bank-Man fried (freed). I contend that his actions continue to help us be free from the bank man.
Interesting fact: John J. Ray III took the CEO's helm when Sam resigned. Mr Ray was appointed to run Enron through its bankruptcy proceedings in the 2000s. Who was the first to receive money back from the Enron debacle? Citigroup, J.P. Morgan Chase, Bank of America, Barclays, Deutsche Bank, Credit Suisse First Boston. You get the jist...
