Financial Censorship Is Becoming Pervasive
To investors, It was reported late last week that the United States would be confiscating billions of dollars from the central bank reserves of Afghanistan. This seemed a little weird at first, but I didn’t want to jump to conclusions since governments are always doing counter-intuitive or seemingly insane things. After digging into the story, it appears that this is a highly unusual decision that could have significant impact on finance, geopolitics, and technology moving forward. Here is what is happening:
Now it is important to call out that this is a highly complex situation. But it is also a highly irregular situation as well. The central bank of Afghanistan was holding billions of dollars in US-based financial institutions and had no sovereignty over those funds. This wouldn’t seem overly weird for a central bank except the US had invaded the country and was actively occupying it for the better part of 20 years. Second, the use of an Executive Order to compel US-based financial institutions to turn over client assets to the Federal Reserve is as outrageous as it sounds. The Federal Reserve is allegedly an independent, private organization so it is noteworthy that the President and his administration is forcing one private organization to allow another private organization to confiscate client assets. Third, the $7 billion of Afghan central bank assets are the property of Afghanistan. Any attempt by the United States, the President, or the Federal Reserve to prevent the country of Afghanistan, and it’s citizens, from accessing or retrieving their property is equivalent to theft. Regardless of the reasoning or the moral appeal, the United States is confiscating billions of dollars of assets from a country that we are no longer at war with, and a country that we are reportedly trying to help become independent. Fourth, the United States is conducting this highly suspicious activity at the same time that it is becoming clear that the Afghan people are suffering immensely. In the White House press release related to the Executive Order, these are the facts outlined to highlight the dire situation on the ground:
So we know the citizens of Afghanistan are struggling and the current administration has still decided to withhold potential aid, and the property of those citizens, because of political motivations. It is really crazy to think about the nuances of this entire situation. So why am I writing about this? The idea of financial censorship is becoming more pervasive. We have the US confiscating Afghan central bank assets. We have the US threatening Russia with removal from the SWIFT payment system depending on what actions Russia pursues in Ukraine. We have the Canadian government pressuring technology companies and financial institutions to confiscate any funds that are being sent to the truckers’ Freedom Convoy protest. Each of these situations is different, but they are all a form of financial censorship. The more aggressive that governments become with financial censorship, whether towards each other or towards their own citizens, the more popular that bitcoin becomes in the eyes of those on the internet. Every attempt at financial censorship is a marketing campaign for bitcoin. Bitcoin is censorship-resistant money. No one can prevent you from sending it to anyone else. No one can confiscate it from you without your permission. No one can debase the currency. Bitcoin is freedom technology. It gives a user, from individuals to organizations to nation states, the freedom to choose how to use the digital currency. You can hold it. You can spend it. You can send it to someone. Whatever you want to do, you’re allowed to do it. No government, company, or individual can impose their views or desires on you. If the Afghan central bank has sovereignty over their assets, the US couldn’t confiscate them easily. If the Freedom Convoy raised money through a censorship resistant currency, no one could have taken those funds from them. That is where the world is headed. Sovereignty. Censorship-resistance. Decentralization. Individual rights. Slowly, but surely. Bitcoin is inevitable. It returns the world back to sound money and to individual sovereignty. Those may seem like crazy ideas on the surface, but we are watching multiple examples play out that prove why it is so important. Have a great day today. I’ll talk to everyone tomorrow. -Pomp If you are not a subscriber, join 215,000 other investors who read my personal opinion on finance, technology, and bitcoin each morning. SPONSORED: Bitwise is one of the largest and fastest-growing crypto asset managers. As of December 31, 2021, the company managed over $1.3 billion across an expanding suite of investment solutions, which include the world's largest crypto index fund and other innovative products spanning Bitcoin, Ethereum, DeFi, and crypto equities. Whether you’re an individual, advisor, or institution, Bitwise provides intelligent access to crypto with your unique circumstances in mind. Visit www.bitwiseinvestments.com to learn more. Certain of the Bitwise investment products may be subject to the extreme risks associated with investing in crypto assets. Visit www.bitwiseinvestments.com/disclosures/ to learn more. LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE Rishi Khanna is the CEO of Stocktwits. In this conversation, we discuss Stocktwits' business model, social investing, NFTs, Cryptocurrency and the vertical integration of trading infrastructure and the social audience that Stocktwits has. LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE Podcast SponsorsThese companies make the podcast possible, so go check them out and thank them for their support!
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