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.