In a test of worlds colliding, I asked Chat GPT to give me some thoughts
about the President’s State of the Union (SOTU) Address and its perspective
on crypto. I was disappointed to be told that “the President made a strong
statement about crypto. He asserted that crypto technology is here to stay,
and that it has the potential to reshape the industry and foster innovation
worldwide.”
Disappointed for several reasons, first, because the AI results were not
accurate, and second because there was actually no mention of crypto
anywhere in the President’s annual address to Congress and the American
people. In spite of all of the recent positive press about Chat GPT (sorry
Google), this “history changing” application couldn’t crack the list of other
key topics demanding to be covered. And further, even though the total
value of all cryptocurrencies is estimated to be $2.7 Trillion, that is still
only about 2% of the global economy.
This is not to say that crypto was ignored by the executive branch or its
regulators. In January, the Federal Reserve rejected crypto bank Custodia’s
two-year application to join the Federal Reserve System and earlier this
week, crypto exchange Kraken agreed to shut down its cryptocurrency
staking service. In addition, Kraken agreed to pay $30 million in penalties
to settle US SEC charges that it failed to register its program. This will
more than likely impact exchanges with similar offerings. Ironically,
decentralized (that is less regulated) staking providers will be able to
leverage their resistance to regulatory action as a competitive advantage.
In many ways, the crypto industry is still in its early stages and the
potential for disruption of traditional financial systems remains immense.
Despite these recent regulatory challenges, crypto continues to prove itself
as a resilient technology with real world applications that can benefit both
individuals and businesses alike. As crypto gains more mainstream
acceptance through increased adoption by governments, banks,
corporations and other institutions around the world, it will continue to
revolutionize global finance. Let the journey begin.
