Tuesday, July 9, 2024

The “Cantillon Effect” can potentially be mitigated by the presence of “Bitcoin-only” companies at the negotiating table, according to Terrance Yang, Managing Director of Swan Bitcoin. Yang argues that establishing sufficiently large “Bitcoin-only” companies is crucial for ensuring fair representation of the crypto industry in negotiations with the U.S. Federal Reserve and major financial institutions. He points to the recent settlement between the U.S. Department of Justice and Binance as a development that increases the likelihood of such companies participating in these discussions.

The Cantillon Effect, as explained by Swan Bitcoin’s co-founder and CTO Yan Pritzker, highlights the need for the crypto industry to defend itself against increasing pressure from opponents. Typically, this defense involves having a diverse selection of banks willing to engage with cryptocurrency companies. However, Pritzker suggests that making crypto companies sufficiently large and influential is a more effective strategy for becoming relevant negotiators.

Critics of this approach raise concerns about the potential long-term consequences for the industry. Nevertheless, Terrance Yang emphasizes Swan’s belief in the necessity of this solution. He argues that for decades, the U.S. Federal Reserve Bank and major financial institutions have held the primary negotiating positions, and Swan has conducted a detailed study illustrating why this status quo needs to change. Yang asserts that the Federal Reserve’s actions contribute to the Cantillon Effect, which, in turn, affects inflation and fiscal debt.

Terrance Yang also addresses the issue of false narratives surrounding cryptocurrencies, often perpetuated by critics such as U.S. Senator Elizabeth Warren. He suggests that some entities may have incentives to promote and spread these false narratives. Therefore, he advocates for individuals and entities with good standing in the crypto industry to engage with their Congressional representatives, speak out on social media, and cease doing business with “bad actors” facing legal issues.

Despite recent regulatory actions in the United States that may lead some crypto firms to consider relocating, Yang remains optimistic about the future of Bitcoin in the U.S., asserting that it will continue to thrive.

In summary, Terrance Yang believes that the presence of substantial “Bitcoin-only” companies at negotiation tables with financial institutions and regulators is essential for the crypto industry’s fair representation and defense against the Cantillon Effect and false narratives. He remains confident in Bitcoin’s prospects within the U.S. market.

Frequently Asked Questions (FAQs) about Crypto Negotiations

What is the Cantillon Effect mentioned in the text?

The Cantillon Effect refers to the phenomenon where the actions and policies of central banks, such as the U.S. Federal Reserve, impact different parts of the economy unevenly. Specifically, it can affect the distribution of wealth and resources, often benefiting those who are closer to the source of newly created money.

How does Terrance Yang propose countering the Cantillon Effect in the crypto industry?

Terrance Yang suggests countering the Cantillon Effect by establishing “Bitcoin-only” companies that are large and influential enough to participate in negotiations with the U.S. Federal Reserve and major financial institutions. These companies would represent the interests of the crypto industry and help ensure fair representation.

Why does Terrance Yang emphasize the importance of “Bitcoin-only” companies?

Yang believes that “Bitcoin-only” companies are essential because traditional financial institutions have historically been the primary negotiators, which can lead to an uneven playing field for the crypto industry. He argues that having such companies at the negotiating table is crucial for a more balanced representation.

What role do false narratives play in the crypto industry, as mentioned in the text?

False narratives in the crypto industry, often perpetuated by critics, can create misinformation and negatively impact the industry’s reputation. Terrance Yang suggests that some entities may have incentives to spread these false narratives, and he encourages reputable individuals and entities to counteract them through engagement with representatives and social media and by avoiding business with problematic actors.

Despite regulatory actions, what is Terrance Yang’s outlook for Bitcoin in the U.S.?

Terrance Yang remains optimistic about Bitcoin’s future in the United States. He believes that Bitcoin will continue to thrive in the U.S. market, even in the face of recent regulatory developments that may lead some crypto firms to consider relocating.

More about Crypto Negotiations

  • Cantillon Effect – Learn more about the Cantillon Effect and its economic implications.
  • Swan Bitcoin – Visit Swan Bitcoin’s official website to explore their platform and services.
  • U.S. Department of Justice – Access the official website of the U.S. Department of Justice for information on legal matters and settlements.
  • Binance – Explore the Binance cryptocurrency exchange and its recent developments.
  • Elizabeth Warren – Visit the official website of U.S. Senator Elizabeth Warren for her perspectives on various issues.
  • Bitcoin – Learn more about Bitcoin, the leading cryptocurrency, and its role in the crypto industry.


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