Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law. Editor’s note The final scene of Animal Farm, Orwell’s classic fable of revolution gone wrong and a staple of secondary-school reading lists throughout the English-speaking world, features a card game. The pigs who run the farm with an iron hoof host the humans who have gone from enemies of the revolution to drinking buddies of the revolution’s leaders. The book ends with accusations of cheating and a metamorphosis realized. The pigs and the men look just the same. If you squint, …

The President and CEO of the Federal Reserve Bank of Cleveland has revealed details of the Fed’s ongoing research into a potential digital dollar. Speaking in a keynote address on September 23, Loretta Mester emphasized that the Federal Reserve has been exploring central bank digital currencies (CBDC) since before the pandemic, noting that its Board of Governors has been “building and testing a range of distributed ledger platforms to understand their potential benefits and tradeoffs.” She also noted initiatives from regional Federal Reserve branches, including a multi-year partnership between the Massachusetts Institute of Technology (MIT) and the Boston Fed, in …

This past summer, a Switzerland-based blockchain investment company called CV VC, and a Swiss audit and advisory firm known as PwC, in collaboration with Cointelegraph, put together an in-depth report on the top blockchain companies and what they are up to in their distinct sectors. The report lists eight separate categories. Cointelegraph hosted a previous panel on Sept. 9 discussing blockchain’s impact on the art industry — the first category on the list. Moving down that list, Cointelegraph hosted a second live panel on YouTube on Sept. 22, talking about brokers and banks involvement in the crypto and blockchain space …

The European Central Bank has warned the global community about the risks of so-called “stablecoin runs.” Analogous to the term “bank runs” in the traditional financial system, stablecoin runs could occur if end users lose confidence in the issuer or its network, the ECB writes in a report released Tuesday. In traditional finance, a bank run occurs when a large number of customers withdraw their deposits simultaneously over concerns of the bank’s solvency. As more people withdraw their funds, the probability of default increases, triggering more withdrawals. The ECB goes on to say that, during such a run, some parts …

The major banks who were mentioned in the recent FinCen leak were subsequently thrashed by the market today. According to the investigation conducted by the International Consortium of Investigative Journalists, over the 20-year period from 1997 to 2017, the listed financial institutions facilitated over $2 trillion worth of suspicious transactions. When this news broke out yesterday, it was a day of reckoning for many of these institutions. Stocks top-5 banks by the amount of suspicious activity. Deutsche Bank was allegedly singularly responsible for over $1.3T of such transactions. To put this into a crypto perspective, according to data from Chainalysis, …

Per an interpretive letter from the U.S. Office of the Comptroller of the Currency released on Monday, national banks will be free to hold reserve currencies for stablecoins. The new guidance reads, "We conclude that a national bank may hold such stablecoin 'reserves' as a service to bank customers." Alongside the announcement, Acting Comptroller of the Currency Brian Brooks noted that stablecoin services are already a part of many banks' activities: “National banks and federal savings associations currently engage in stablecoin related activities involving billions of dollars each day.” The letter does, however, specify that for now, this will only …

Retail central bank digital currencies, or CBDCs, do not require the use of blockchain technology, according to executives at major European central banks. Thomas Moser, an alternate member of the governing board at Swiss National Bank, and Deutsche Bundesbank’s Martin Diehl discussed the state of CBDCs at the European Blockchain Convention Virtual 2020 conference on Monday. During the online panel discussion, both Diehl and Moser seemed to agree that global retail CBDC projects do not need blockchain, citing a number of reasons. Moser said that the primary use cases for blockchain intend to provide trust when a project has no …

Bitcoin (BTC) starts a new week still looking for $11,000 support as macro markets wobble over coronavirus and banks’ criminal activities. Cointelegraph highlights five factors that could shape BTC price action in the coming days. Banks face money laundering deluge While central banks grappled with dramatic shifts in United States economy policy, fresh leaked files showed yet more evidence of largescale money laundering. A huge trove of documents from the Financial Crimes Enforcement Network (FinCEN), dubbed the FinCEN Files, found its way to investigative journalists throughout the world this month, and the focus was clear: illegal activities gone unnoticed. One …

We aren’t taught real economics in school. We learn, instead, voodoo economics. For example, rarely — if ever — do professors present us with the valuable insights highlighted by the Austrian school of economics. Individuals, therefore, need to break their conditioning to understand how the financial world works. The truth of how the financial system was built, how it works, who controls it, and so on is a whole new world to them. If you really dig into the truth and start to see how it all works, you might make certain connections, such as why Jesus expelled the money …

By way of disclaimer, today’s Law Decoded is going to be especially America-centric. Writing to you from the ghastly swamp that is Washington, D.C., I generally try to keep these newsletters more globally minded, displeased as I am with how often the news cycle acts like this town is the center of the solar system. Thematically, however, the relationship between the capital and the rest of the country is central to this week’s news. U.S. federalism is a critical feature of this remarkably frustrating country. The back-and-forth between federal and state power is one of the defining tensions of these …

A recent study examined the response of the 15 leading North American banks to the COVID-19 pandemic. Researchers discovered that tellers only at three banks wore masks 100% of the time. Participants visited 700 bank branches across the continent belonging to leading institutions, such as Bank of America, Chase, Citibank and TD Bank. Overall, these 15 banks operate over 33,000 branches. Source: Dalbar. It appears that the ATMs present the sorest point for the banks. The ATMs in only 19% of the examined U.S. branches had a sanitizer available, and only 20% of the branches were equipped with dividers between …

As an anarcho-capitalist, I hold that property rights are sacred and that violence is acceptable only when our natural rights, as embedded and enshrined in the Constitution and Bill of Rights, are under a direct and imminent threat, and only in self-defense. I might be the first anarchist, anarcho-capitalist, or minarchist you’ve ever met. Those labels may sound scary to some — that’s fine. Democrats and Republicans call each other scary names all the time, too. But all my labels mean is that I believe in a monetary system that presumes freedom more consistently than that which is advocated by …