Crypto Plan for Social Control?
The Senate's plan for regulating stablecoins could furnish powerful new means of social control by the federal government and the financial industry.
The GENIUS Act stablecoin bill cleared a critical vote on Wednesday and appears to be headed toward passage in the U.S. Senate. The Hill reports:
The Senate voted Wednesday to advance legislation setting up a regulatory framework for payment stablecoins, bringing the crypto bill one step closer to a final vote in the upper chamber.
Eighteen Democrats voted with almost every Republican to end debate on an updated version of the GENIUS Act.
The new bill text was reached as part of lengthy negotiations between Republicans and crypto-friendly Democrats last month, ahead of an earlier procedural vote on the Senate floor last month.
The bill is designed to protect big corporations and financiers and strengthen the U.S. government’s control over the emerging technology, Glenn Beck and Justin Haskins argue at Beck’s website:
The GENIUS Act, short for the Guiding and Establishing National Innovation for U.S. Stablecoins Act, is being promoted as a bipartisan step toward a more stable crypto landscape. But this bill could lay the foundation for a programmable digital currency. It would not be controlled by the people and would offer few real privacy protections. Instead, power could concentrate in a handful of elite financial institutions, operating under the heavy hand of government regulation and influence.
The legislation would tie stablecoins to the U.S. government, the authors note:
The bill mandates that stablecoins be backed by cash or government debt. Treasuries pay interest; cash does not. That financial reality creates an obvious incentive for stablecoin issuers to pour funds into Treasuries, deepening the federal government’s dependency on digital finance.
What we’re left with is a digital dollar in everything but name. It would be privately issued, publicly regulated, and deeply intertwined in government fiscal strategy.
The programmability of the coins would enable the issuers, the federal government, and global institutions to exert all sorts of control over those who use them, Beck and Haskins note:
One of the most alarming features of this emerging system is programmability. Stablecoin developers would have the ability to encode conditions into the money itself. That includes restrictions on where, how, and by whom funds can be spent.
These controls wouldn’t be set by everyday users. They would be dictated by developers and institutions with global affiliations. Some of the top investors in stablecoins have already promoted the use of radical social credit scores, such as ESG. And while these institutions issuing stablecoins aren’t government officials, they often operate under regulatory pressure and in close alignment with the same bureaucratic agenda.
The legislation seems designed to create a public-private partnership to monitor and control people’s monetary transactions, Beck and Haskins write:
The GENIUS Act is not simply a measure to better regulate one part of the crypto industry. It could be the beginning of a new financial infrastructure designed to monitor, influence, and ultimately control the public.
This is how central bank digital currency might arrive in the United States. It might not come from the Federal Reserve, but through private issuers that are shaped, restrained, and quietly directed by federal regulators. These issuers are not elected. They are not accountable to you. Yet they could soon determine how your money functions.
We have been down this path before. The Digital Millennium Copyright Act of 1998 was supposed to benefit the public by protecting providers of web content, and it ended up in a conspiracy between those businesses and the federal government to censor information damaging to candidate Joe Biden in the runup to the 2020 presidential election, and much more collaboration to suppress public knowledge thereafter. If Beck and Haskins are right, the GENIUS Act may be another great, big, candy-coated poison pill.