If big tech can issue their own currencies for use around the world, what chance is there that macroeconomic control of the national economies of the world can be maintained? The threat of global meltdown is very real.
This is the audio version:
This is the transcript:
In the USA, they're trying to pass something called the GENIUS Act. But let me assure you, this is not a work of genius. In fact, it's something very different to that. This is something that is very dangerous, for you, for me, for global financial stability and for the macroeconomic control of any country. This needs to be talked about as a result.
So, what is the Genius Act? It is the Guiding and Establishing National Innovation for US Stable Coins Act, which is a contorted way of coming up with 'genius', which is what they obviously wanted to spell out.
But the reality is that this is all about providing the power to major US social media companies to create their own stablecoins, which are, of course, a form of cryptocurrency.
What it comes down to is that big tech isn't happy with just taking over our lives through the supply of social media, and it isn't happy with taking over democracy in the USA. Now it wants to take over banking and money itself, and all within an environment of light-touch regulation.
This bill is a massive threat to democracy and to our economy.
What the Genius Act permits is essentially this. Non-banks will be able to issue what are called stablecoins. Now these are cryptocurrency. Make no mistake about that.
We could have a Meta buck, or a Google buck, or an X, whatever you wish to call it. These things would be created by these companies and be named by them.
They would be subject to light-touch regulation, but the point is that, supposedly, and because they are stablecoins, each of them will be linked to the value of the dollar. In other words, the Meta buck might be one Meta buck for $1, but it could be two Meta bucks for $1, and the Google buck could be four Google bucks for $1, or whatever they wished.
The point is, what this creates is the opportunity for tech giants to act like private central banks, creating and issuing their own money. And the temptation to do this once the Act is passed is going to be absolutely enormous because what we already know is that of course, all these social media companies exist not to supply us with information, which they do by and large for free, but to control the digital transactions that flow from that information.
And so what's going to happen is that these tech firms will create not just a means for payment, which they already have done, but linked in most cases to some form of credit card or other banking facility outside their control, and instead will create such a facility under their control.
They will not only make profit from supplying the content for their sites, they will make profit from the products sold from their sites, and they will make profit from the payments on their sites, and they will even make profit from the control of the medium in which that payment is made on their sites. And they will set the rates, the fees, and the terms for the use of this money.
It isn't like our current money, which you can get simply in exchange for your earnings, or for however else you make money. No. The access to these types of money will be determined by the companies that issue them, and they might, of course, make them the exclusive mechanisms for payment on their sites, and that is quite extraordinary. This is a monopoly that will exist from beginning to end for every type of transaction on their social media sites.
And what the big tech companies have lobbied the US government to deliver, and both of the major political parties in the USA have signed up for this because this is both Democrat and Republican backed, is to take these new currencies out of mainstream regulation. There is something called the CFPB in the USA, the Consumer Financial Protection Bureau, which exists to prevent people being ripped off. To stop fraud taking place. To stop exploitation. And, very obviously there is a significant market which that bureau has to regulate with regard, at present, to online payments, because we all know that online payments are an area where fraud is prevalent. But this Act will take these currencies out of the oversight of that board. In other words, there will be no effective regulation on what these companies will be doing.
And this, I would suggest to you, is deeply dangerous; the historical precedents are dire. Before the Great Depression in the 1930s, there were problems in the USA with a lack of division between banking and business.
After the Great Depression, the US learned its lesson. What it realised was that commercial banks, the people who held money on behalf of Joe Public and who managed the payment systems for them, had to be separated from all other risks to guarantee that they could not fail when everybody else around them was. That was the great lesson that came out of the 1930s, and it was wrapped up in something called the Glass Steagall Act, which didn't even allow banks to undertake investment activity; that is, until 1999, when Bill Clinton withdrew the act in question.
And that deregulation is now too commonplace already within the system, but what we're seeing here is something that is going to force deregulation very much further. The barrier between trade and the whole system of payment is basically going to disappear. This is the inevitable consequence of what crypto has been lobbying for.
If the 2024 presidential election in the USA was about anything, it was about cryptomoney. Millions of dollars were poured by crypto companies into the election campaigns; again, I stress, to both sides of the debate, and the consequence is that now we have this potential risk to the US economy, which will, of course spread.
Let's be clear, once these companies, whether they be Meta, Facebook, X or whatever, get used to charging using their own currencies in the USA, you cannot imagine them stopping there. They are going to demand the right to use these currencies in other countries, but that, of course, creates major problems because what is going to be used for payment in other countries? Or is there going to be a fixed exchange rate? And if there isn't, how are we going to know precisely what it is we're being charged for?
Suppose Amazon create an Amazon, whatever they wish to call it. Just maybe call it an Amazon, as a unit of currency. They will use this to price in the USA. But suppose they priced in the same way in the UK. There would obviously need to be a price differential.
How would you get around that?
How would you manage that?
How would you understand what today's transaction and translation rate is?
Would you know for sure, or is there, in this, the most extraordinary ability to undermine the stability of actual currencies?
But most of all, what we end up with is the risk that we'll end up with undemocratic control of worldwide currencies that will deeply threaten the stability of nationally issued currencies, and that would destabilise central bank control of interest rates, and inflation rates, and recessions, and everything else around the world.
The whole idea that we currently have of the management of an economy is based around the fact that there is only one legal tender in a country, and that is the basis on which central banks can manage the way in which the economy works. But once we have major corporations issuing their own currencies, which will become commonplace in use because they might require that they be used and that you maintain some form of bank account with them to be able to spend on their site, which you can easily imagine, they might, then the control of the economy is going to be very much harder.
And in particular, that will be the case if they begin to offer loans in this currency, with their own interest rates, and their own effective banking operations. How then will you be sure that there is, well, simple financial control on the amount of money in use in the economy, which is one of the bases of general monetary policy?
But there's more risk than that. Everything would probably work fine with these currencies if all were going well, but what happens when a stablecoin becomes illiquid? Suddenly, everybody wants to take their money out. Will these tech companies have the depth of resources available to them to actually pay everybody out on demand? Or could we suddenly find that we could end up with runs on the bank?
Remember, runs on banks are not unknown in history. In the UK, there have been very few of them. There have been more in the States, but in the UK, we did have one in 2007. Northern Rock had a run on the bank, and the only way in which that situation was maintained was for the UK government to guarantee that everybody would get their money.
What would happen if one of these stablecoin, supposedly linked currencies, began to fail? Would that then translate into a traditional financial system crisis?
Would these private companies distort real pricing and demand?
Would they issue signals to the markets, which in fact might lead to economic mismanagement by central banks?
And could the tech firms in fact capture data which will let them manage the economy to an extent beyond the control of central government operation, altogether?
And remember, that is, of course, very clearly within the goals of some of the big tech companies. Remember, the big tech companies are, in many cases, closely aligned with the interests of the far-right in the USA. They're very pro-libertarian, which actually, for most people, means they're anti-freedom, because for most people, that's what pro-libertarian means. And they are very anti-government. So the opportunity that this will provide to tech companies to potentially undermine the economic and tax sovereignty of a state would, for some of the operators, be very attractive indeed.
These currencies might, like all cryptocurrencies, then become used for illicit financial flows or plain, straightforward tax evasion activity. There would then be a threat to tax revenue.
Now, in that case, this is not innovation. What we are seeing in the Genius Act is nothing like genius. What we're seeing is a plain, straightforward, frontal assault on the power of the state, and a claim that monopolies should have their reach extended. It's all about granting a few companies around the world the right to make profit almost without limit; the right to grant them economic control and power, and the right to remove from the public the information that they need to make their own choices, because in many cases, the existence of these multiple currencies will be deeply confusing.
How will you compare a price on one platform with another one if they're using different currencies?
Is everybody going to get out their calculator and check?
Are they going to be mechanisms for exchanging money that you had left on Amazon to now buy it on another site?
Who knows?
All of these risks are real, or they're an impediment to trade.
The point is, the Genius Act is by no means in your best interests.
This Act is stacked against your best interest.
It's stacked against the best interests of our government.
It's stacked against the best interests of our tax system.
It's stacked against the best interests of all the people who rely upon government services.
It is therefore a deliberate power grab to undermine everything that is of value in our society.
In that case, shouldn't you be shouting out and saying no to the Genius Act, wherever you are? Because it might just be a US Bill at present, but you can sure as heck bet it's going to spread around the world pretty quickly.
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How long until Farage, Tice and co advocate for it here?
A week next Tuesday
that long?
🙂
Thank you, both.
@ Ian: https://cryptonews.com/news/nigel-farage-to-pitch-uk-as-crypto-powerhouse-at-bitcoin-2025/ and https://news.sky.com/story/reform-uk-to-accept-crypto-donations-farage-says-13377162.
I’m looking forward to Labour shooting Farage’s fox and stealing his bill.
Richard is right to highlight the repeal of Glass-Steagall. The government will soon replicate here by removing the Vickers ring fence.
I think the essential problem for those who believe in personal responsibility is the moral hazard from the guarantees. People will invest up to the guarantee knowing that they cannot lose, those selling the coins will make out. The UK should take note and reduce deposit guarantees to no more than twice the benefits cut off I would suggest to head off exploitation of govt by the rich.
Why? I see no logic to this.
I always thought the biggest danger was that Big Tech’s next strategic economic step would be simply to begin taking over the banks. a Stablecoin (an Orwellian word) may be an intermediate step, or it may prove a faster alternative. Either way, this move is effectively the next big revolutionary neoliberal idea; the privatisation of government itself. Once you own and control digital communication (where the economy is increasingly conducted, and most private communication), and a viable currency; you do not just have a form of cryptocurrency as it now exists (separate but parasitic on the money status quo); but through the vast reach and necessary use of Big Tech by everyone, including government; you then have a means to induce people to use your Stablecoins to access Big Tech’s services; and once that is familiarised and embedded, it is possible to make it compulsory to use Stablecoins to access digital services (for business and personal use).
By the time the penny drops with government (well, look at our politicians) it is too late. Stablecoins have then offered possibly a more compelling inducement than the dollar. Then, the right of governments to tax at all comes under severe neoliberal attack, as a form of robbing the taxpayer of his/her money – you already know how that debate goes: you can offer the possibility of eliminating the national debt entirely, and privatising everything.
That is one way it goes. The other way, is also bad: the biggest crash in economic history. Note that at the very beginning of this modern world, when government passed decisively from monarchy to Parliament in Britain, it was because taxation and money (the latter through the emergence of a central bank) was managed and controlled by Parliament, not the Crown; Parliament came to dominant power through its de facto control over taxation (the fiction was the ‘Crown in Parliament’).
In the early eighteenth century the modern development of a currency in France, led by the genius of John Law, created a central bank that used currency backed by land as the inducement to trust the currency (but problematically the land was in undeveloped Louisiana), with the Mississippi Scheme; it bust spectacularly around 1720. Around the same time the greatest bust in British history (with the possible exception of 1929, with a quite similar economic scheme, using a Tory-backed alternative bank to the BoE (the Sword Blade Company), in a bust that became known as the South Sea Bubble (I have, of course grossly simplified both stories). Big Tech however, provides a far, far bigger threat than either; its inducement is not a fantasy, too far away for anyone to understand. Big Tech is here and now, and it works for everybody already – it has value and is (de facto) trusted (far too much); the whole world was so completely seduced by Big Tech, it coughed up all its its personal, intimate details to Big Tech long, long ago. The seduction is complete. Now comes the gravy train……
Thanks
@ readers: May I add that I don’t think any regulator, spad or politician has the grasp of what John and Richard have on this issue. What does that mean? We are stuffed!
Worrying, in many ways
Thank you and well said, John.
This bankster agrees with you and notes how, from about 2020, Amazon, Microsoft and Google began to recruit bank regulator, lawyer and compliance staff.
It’s interesting that John mentions John Law. Mauritius and Louisiana have much in common. It’s the part of the US that I feel most at home in.
Superbly & simply expressed. I agree!
I saw the light on big tech around 2008, campaigning with NoDPI on the BT/Phorm DPI scandal, including BT, TalkTalk or StalkStalk as we called them (Dido Harding), Virgin Media, and Google as it then was, Yahoo!, and a few others, including of course, Blackrock on the money side.
On retirement, I switched to free open source Linux (Mint xfce) for my computer OS (easier than it looks), to phone shops for refurbished laptops (which run Linux Mint much faster than Windows 10), and to FreeOpenSourceSoftware (FOSS) which I make voluntary donations for (Libre Office, and FOSS email & browser & other FOSS utility programs. I don’t use “free” email (it’s too expensive), so pay for my own email account and avoid leaving all my email on an IMAP mail server to be hacked (not tech savvy enough to run my own email server). Its lovely to not have to worry about Windows 11 trying to take over my life and force me into hardware upgrades. I avoid billionaire owned social media (I use Mastodon), avoid Meta (Facebook, WhatsApp), Alphabet, Google Search, I don’t “log in with your facebook or google ID”, and I have a personal domain (no website) that I use to generate unlimited unique disposable forwarding email addresses, one for each organisation/company I deal with. I don’t buy from Amazon, for both privacy and ethical reasons and ask friends to avoid buying me presents from big corporations.
I avoid Apple phones but am not yet tech savvy enough to avoid android.
I’m investigating more ethical banking in hope of escaping HBOS, maybe Triodos? I use mutual Building Societies.
I don’t trust the major ISP crooks, and have been with Zen for 7 years, with no regrets.
I use cloud (but not MS or Google versions) for temporary external file transfers but for storage/backups, I run my own cloud at home on a drive connected to my router.
I avoid all store loyalty cards, the freebies they offer are too expensive.
I can’t avoid the deep state, the police, or America, Russia or Israel, but I try and make the collection of a commercial profile on me, virtually worthless. I don’t use spam filters because I don’t get spam.
Outside of work, it is possible to almost avoid big tech. It is v satisfying.
I wish I had that energy!
This is part of what incentivises me to use multiple disposable email addresses.
https://www.theguardian.com/politics/2025/jun/04/100000-uk-taxpayer-accounts-hit-in-47m-phishing-attack-on-hmrc
We have to assume nothing we do online is secure.
Of course the scammers will now be writing to us pretending to be HMRC.
Be very careful!
The genius is to add crypto to the existing shadow banking operated by private equity and hedge funds. Two non-bank systems offering poorly regulated lending and crypto offfering multiple unregulated forms of money. Here comes the next financial crisis.
Amazon already run currency exchange services, though UK residents will not be aware. I live outside the Eurozone and buy regularly from amazon.de. I check their exchange rates occasionally to ensure I am not being ripped off.
Now think of the various forms of air miles and loyalty points common to retail: they are also unregulated currencies. Global retail businesses are already replacing banks.
Earlier versions –
Green Shield stamps, Christmas clubs, utility company credit balances, insurance companies and pension trustees who seem to engineer inexplicable delays when parting with money due policy holders or their beneficiaries, as if every claim threw up inexplicable unique administrative difficulties (such as parting with money).
Supreme national champion at this being HMG – current example, compensation due to wronged sub-postmasters in Post Office/Horizon conspiracy.
Not quite the same league though – although I get the point
I recall reading a piece/seeing YouTube video about how – essentially – some American airlines were becoming loyalty program reward miles companies (which made the profits) with an airline subsiduary (loss making) … ahh, found it: ‘How Airlines Quietly Became Banks’ https://www.youtube.com/watch?v=ggUduBmvQ_4
Car companies almost only make money from finance now.
Perhaps a bit whimsical, but I’ve been wondering whether Nectar points and the like are something of a Trojan horse, softening us all up for the notion of alternative currencies. They seem benign – you can even donate them to charity. So they’re nice and cuddly. But I wonder.
Just a late evening thought on Nectar points, and the way they might be paving the way for the kind of unregulated currencies you’ve described. Business travellers earn Nectar points on BA flights. There are other kinds of points for business travellers, eg for Eurostar. I understand HMRC turns a blind eye.
Amazon currency would be the Amo.
To be used against us.
But let’s hope all other countries and their people get the message that this really is a self-destruct suicide option.
In a reply slightly related to that of Ian Stevenson, here is Farage on stage in Las Vegas announcing that Reform’s policy on crypto includes the BoE holding Bitcoin as a reserve…
https://www.youtube.com/watch?v=loPz0f4mDVc
If “you” don’t hear Tennessee Ernie Ford singing “16 Tons”, “you” are obviously too young to understand the concept of the company wage tokens paid for use in the company store in the company town where you live in the company house…
Wage Serfdom
https://youtu.be/S1980WfKC0o?si=QeAkM0_kJ-zCNt50
A part of my childhood, that song.
These big Tech firms already behave like currency issuers – in that they can create new shares from nothing to pay suppliers, employees and even for acquisitions. This is why they have to hype themselves constantly – so that investors continue to believe that they will go on growing as infinitum.
https://www.linkedin.com/posts/kirstengibbs_pluralistic-sarah-wynn-williamss-careless-activity-7324375203101163520-sQ8Y/
So of course they want to issue their own stablecoins, for when the hype finally gets overtaken by reality.
You are right, technofeudalism here we come…
These delusional feckwits really do believe in what they’re spouting.
Meanwhile, every other global economic powerhouse laughs from an increasingly solid position.
I’m puzzled and worried by this and don’t understand what “other purposes” to quote it, other than regulation, this act is for. Also I haven’t heard the name Trump much in the discussion. Presumably it is opportunistic but to go to your opening remarks who are “they”? I’m assuming Haggerty is basically a stooge who’s only motivation in introducing this is self enrichment. Any enlightenment welcome if you have a minute Richard!
I can only guess
My point is to highlight the risk based on what we do know
Part of the dawn of modern capitalism, being paid in a medium that could only be used to pay rent and buy in the company shops. Cromford, Derbyshire was the prototype I suspect.
https://en.wikipedia.org/wiki/Cromford_Mill
In its time, a means of total control.
Robert J, I only understood about 1 in 10 of your words in your interesting post about avoiding computer surveillance. For clarity, I’m not being sarcastic here. It definitely gives me some things to think about. Going to get husband to print it off so I can have a proper think about some of it. I’d like to get rid of Microsnot too, if I can find the time and energy. But I suspect most of the rest is too complicated for me!
The one thing we definitely have in common is Zen Internet. I’ve been a customer both at home and at our caravan in Wales for over 20 years, with a brief gap at home when we moved house and had Virgin for a while, I can’t remember why now, but went back to Zen as soon as Virgin contract finished. They have *wonderful* customer service, they never treat you as a fool even when you phone them with what is prob to them a silly question. Which I’ve done on several occasions! Really can’t praise them enough.
As to Green Shield stamps mentioned in your later post, I have a funny memory of them. We were on our way to visit friends near Manchester, driving on the East Lancs Road – it was before the time of the motorway. A large lorry had broken down, and its back doors flapped open to shed loads of books full of Green Shield stamps onto the road. Lots of cars had passed it, then parked up and people were grabbing the books as fast as they could! They didn’t seem to have noticed that the pages were all cancelled, which I could see clearly from our car as we drove past.
If you want to follow up any of the stuff in my post, I’m happy for Richard to give you my email address.
One of the differences about Open Source software is the quality of the volunteer support community.
Thank you RobertJ, that would be very helpful. I’m currently looking at External Hard Drives, with the help of Which Magazine (husband is a member). But not having much time to read anything much at the mo with constant dental appointments! Rolls eyes! Hopefully last one for a while is tomorrow, so I’ll have a bit more time after that, though will be packing to get away to Wales ASAP!
We do have Zen Internet connection there, so even though it might take a day or so to get sorted I will be able to stay online. There can be problems at caravan with pouring rain and howling wind affecting the lines carrying the signal over the winter. They usually get fixed pretty quickly once reported.
Thank you so much for your very kind offer. Best wishes from sunny Liverpool, Maggie.