Tuesday, October 19, 2021

It’s not that the United States can’t do things right. It’s just doing them too slowly.

Sebastian, Canada. See that tree trunk? Its individual sections have been cut away in places.

Now that we’ve grasped your point, let’s apply it to what’s taken place in recent years. The world has seen unprecedented interest in cryptocurrency – blockchain and its applications are being introduced at increasingly more rapid rates – and most of the world’s largest banks have begun to acknowledge it in one form or another. At the same time, the U.S. has brought forward the rate of its regulation, requiring financial institutions to comply with new laws – exactly like we’ve seen in, say, shipping.

Cars: Flashing red lights. Airlines: Entering their time of turbulence. Financial firms: Moving slowly, with increasing impatience.

We all watch the signs like those tree branches, turning from green to orange to red… and all over the place. Why is this changing the shape of business worldwide? And why would this change the trajectory of the U.S. in particular?

Truth be told, a lot of this is happening for all the wrong reasons, and it may mean that the global economy has entered uncharted territory.

Experts to the Rescue

We’ve invested quite a bit of time in examining the trends. In recent days, we spent time with experts to discuss trends that have and will continue to shape businesses in this incredibly changing world. And one of those experts was Sergio Somavia, now Dean of the Stanford Graduate School of Business, but at the time the head of the Paris-based Financial Stability Board (FSB). He told us that the committee’s role over the past year has had a profound effect on how international organizations – particularly those regulated by the International Monetary Fund – view what the future of money looks like.

Think of it this way: The FSB, which is a consultative body that’s tasked with maintaining financial stability, is responsible for a large chunk of global regulation. And it’s coming to a head with regards to such issues as money laundering and terrorist financing.

The FSB has been in the public spotlight before. Before the World Economic Forum, for example, former FSB Chairman Rodrigo Rato opined that money laundering should be treated no differently than alcohol, gambling or firearms. That much has been spoken about. What was not publicised was the fact that the FSB had just issued a 188-page document outlining a series of proposed regulations designed to address those new threats to society.

So much for academic pressure. What happens next will tell us a lot about where the world will be heading in 20 years. And the only way to understand how critical things are in a given area is to have a seasoned veteran on your side who can monitor its evolution.

These so-called experts are those investors who are committed to the movement. That’s right: They are looking to invest in the future, and they’re willing to bet you money that this movement will be successful. They’ve decided that the world has finally decided to take the plunge into something we’ve referred to as the Blockchain of Money – and they’ve made sure that all of the major financial institutions in the world are ready for it.

Monetary Convergence

I just visited Hong Kong’s Securities and Futures Commission (SFSC) with Bill Dobbs, a veteran of that institution. The SFSC has decided to partner with several other authorities around the world in setting up a center that will serve as the hub for blockchain-related issues. The problem is, the SFSC needs these other authorities, because to introduce their blockchain-related issues they need to sign deals with U.S. regulators. And to do so they need the U.S. to issue very specific regulations.

If there are anything that’s struck me while reporting on this issue, it’s the speed at which these laws will be drawn up. Business can take years to pass new regulations. But legislation involving the use of global currencies is happening all the time, with startling speed. That, along with the changes that are taking place in the U.S., is making the U.S. a bit slower than other countries. And that’s becoming all the more apparent in recent months.

This is a major issue. One that, should it happen, could ultimately have serious implications for the global economy.

How fast will it happen? No one knows. But the big changes won’t be quick. They’ll happen very, very slowly, and in effect, will be the result of (at least for now) U.S. policymakers putting aside old rules, and watching what happens in other countries.

That’s the new world, folks. An economic and legal world not fit for humans.

Latest article