As the adoption of cryptocurrency continues, so too does the opposition from powerful institutions that control and benefit from the corrupt financial system that cryptocurrency is in the process of replacing. Over the last few years, these powerful institutions have significantly increased their efforts to regulate, restrict, subvert, and destroy the crypto industry. It’s about time someone called them out by name. Today I’m going to tell you about the institutions that are trying to kill crypto, how they’re trying to do it, whether they will succeed, and what it all means for cryptocurrency.
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BIS
The first institution that’s trying to kill crypto is the Bank for International Settlements, or BIS. This is the self-described bank for central banks.
The BIS is based in Basel, Switzerland, and it is owned by the 63 central banks that make up its membership. The BIS was founded way back in 1930 and is technically the oldest international financial institution in existence. What’s interesting is that the BIS was supposed to be disbanded in 1944 as part of the Bretton Woods conference, still waiting. On its website, the BIS says this is because the financial elite at Bretton Woods didn’t believe the BIS would play a useful role once the IMF and the World Bank had been established.
However, a memoir by one of the economists who was actually present at the Breton Woods conference revealed that the reason for the institution’s intended dissolution was because the BIS had allegedly assisted the Nazis in taking gold and other assets from occupied countries. This was proved to be true in 2013 when the Bank of England declassified documents about how it helped the BIS and the Nazis take gold from Czechoslovakia.
Despite this history, the BIS was never disbanded, thanks in part to influential economists like John Maynard Keynes for context. Keynes is famous for pioneering so-called demand-side economics. Demand-side economics is the theory that the demand for goods and services is fundamentally what causes economic growth and inflation, a theory popular with many central bankers.
Anyway, today the BIS has undertaken a similarly disturbing role. That’s to assist central banks to develop their respective central bank digital currencies, or CBCD’s. They will give central banks the power to decide what you can buy, when you can buy it, where you can buy it, how much money you can spend, and even how much money you can save.
In the words of BIS manager Agustin Carstens, the central bank will have absolute control and will have the technology to enforce that control. It should come as no surprise, then, that the BIS is opposed to all cryptocurrencies, particularly stable coins. This is simply because cryptocurrency undermines the total control of currency that its associated central banks are explicitly trying to achieve with their CBDC, which are themselves clearly direct competitors to stable coins.
So far the BIS’s anti-crypto activities have been limited to reports about why cryptocurrency is bad and why CBDC’s are better. It seems these reports are being conducted under the direction of Hyun-Seung Shin, the BIS’s head of research. Nobody is buying what they’re selling. Even the reporters the BIS invited to its recent press conference about the report were skeptical about the institution’s CBDC push. Even so, there’s no question that the BIS has an incredible amount of influence, especially since central bankers from around the world regularly meet at the BIS’s headquarters in Basel to discuss what they’re going to do next.
FATF
The second institution that’s trying to kill crypto is the Financial Action Task Force, or FATF, an international organization based in Paris, France. It consists of 40 countries and dozens of other international organizations, including the IMF and World Bank. The FATF was founded in 1989 and it was initially established to combat money laundering around the world. Its mandate has since expanded to include anything that threatens the integrity of the financial system, and it achieves this mandate by issuing so-called recommendations about the kinds of financial regulations the countries should implement.
The FATF drafted its first set of 40 recommendations one year after it was founded. The most infamous of these recommendations is the so-called “travel rule,” which requires financial institutions to collect detailed information about anyone sending or receiving more than a certain amount of money, usually around $1,000.
Although the government doesn’t have the power to write national laws, that’s why more than 200 countries have chosen to comply with the FATF’s recommendations. Countries that do not follow its recommendations frequently end up on its graylist or, worse, on its blacklist. Being on the former makes it difficult to interact with the global financial system, and being on the latter makes it impossible. That’s why more than 200 countries have chosen to comply with the FATF’s recommendations.
Now if you’re wondering who writes the FATF’s recommendations, the answer is that nobody really knows. That’s because the FATF consists of unelected officials who hold meetings behind closed doors where they decide what recommendations to pass and which countries land on which list.
Its officials are also effectively above the law thanks to the Vienna Conference on Diplomatic Intercourse and Immunities passed in 1961. Under the Vienna Conference, folks like FATF officials cannot be arrested or detained; they cannot be charged with a criminal or civil crime; and they do not have to pay taxes. FATF officials are also not subject to pandemic travel restrictions.
While it’s not exactly clear who decides what the FATF does, it’s clear that it has strong connections to the United States, specifically the United States Department of the Treasury. Two of the three lead authors of the finalized recommendations for cryptocurrency were from the Treasury Department, and the document notes that the United States is the primary driver behind compliance with the FATF’s recommendations.
This would explain why the FATF’s travel rule is eerily similar to the United States Bank Secrecy Act, which was passed way back in the 1970s and is coincidentally also referred to as the travel rule. It would also explain why the United States isn’t on the FATF’s gray list or blacklist even though up to 40% of all money laundering happens in the USA and why the countries that do end up on the FATF’s gray and blacklist tend to be at odds with the interests of the USA.
Given these facts, it looks like the FATF is another financial weapon the United States occasionally uses against its enemies, and it’s a weapon that’s being used against cryptocurrency as well. Believe it or not, the FATF doesn’t actually want to ban cryptocurrency. It just wants no more peer-to-peer transactions and no more privacy, something it hopes to achieve by labeling any technology or activity related to these two as high risk. In other words, the FATF wants to turn crypto into another arm of the existing financial system, which is, of course, controlled by the United States.
This is pretty bad, but admittedly not as bad as what the BIS is planning. It also doesn’t seem to be working. The countries are taking their sweet time complying with its crypto recommendations and it looks like there are a few which might not impose the crypto trading regulations the FATF wants to see. This might have something to do with the fact that its recommendations don’t work in combating illicit finance. The FATF’s own statistics suggest it hasn’t made a dent in dark money in over 30 years.
If this non-compliance by countries continues, it will be difficult for the FATF to achieve its goal in time because if crypto adoption reaches a tipping point, it will be impossible for politicians to pass the crypto regulations the FATF wants to see because the people will vote against such politicians. It’s also quite possible that by the time compliance starts to come, the financial system will have fragmented to such an extent that the FATF no longer has any influence. This fragmentation has been accelerated by the unprecedented sanctions against Russia.
IMF and World Bank
The third institution that’s trying to kill crypto is the IMF and the World Bank. The International Monetary Fund, or IMF, was created as part of the aforementioned Bretton Woods agreement in 1944.
For those who don’t know, the Bretton Woods agreement is where the world decided to make the US dollar the world’s reserve currency. It’s where the world decided that the other currencies would be pegged to the US dollar at a fixed exchange rate and that the US dollar would in turn be backed by physical gold. The IMF’s initial job was to ensure the exchange rates between other currencies and the US dollar remained stable. But after the US dollar officially stopped being backed by gold in 1971, the IMF turned its focus to financial stability around the world.
The IMF achieves this financial stability by issuing loans to countries in crisis to ensure that the crisis the country is facing doesn’t become an international crisis. The IMF issues loans subject to all sorts of terms and conditions that benefit certain institutions. I’ll come back to those in a second.
Whereas the IMF issues loans without any such terms and conditions, the World Bank provides longer-term financial and technical support to developing countries. Now you can think of the World Bank as being the unofficial other half of the IMF, as it was also created as part of the Bretton Woods conference.
Not only that, but the IMF and World Bank headquarters are across the street from each other in Washington, DC. I’ll just refer to the IMF from here on out, as it’s been much more vocal about cryptocurrency.
If all that info didn’t make it clear enough, as far as I can tell, the IMF is firmly aligned with the interests of the United States, and that’s simply because the USA has the most voting power of the IMF’s 190 member countries.
As far as I can tell, the IMF’s hatred of cryptocurrency has mostly to do with Bitcoin. That’s because Bitcoin is starting to be adopted as legal tender by the kinds of developing countries the IMF is trying to control, notably El Salvador and the Central African Republic. This is why the IMF included a clause in its debt deal with Argentina to discourage the adoption of cryptocurrency, something that I’m sure is going to become more common as more countries start adopting cryptocurrency and Bitcoin in particular. By the way, the clause didn’t work. Argentinians are still adopting Bitcoin and stable coins to protect themselves from inflation.
The IMF knows that central banks around the world are slowly ditching the greenback in favor of alternative currencies. You might also recall that this is why it’s possible other countries could adopt the BTC. Case in point, the chairman of the central bank of Switzerland recently noted that it could hold bitcoin on its balance sheet once it becomes big enough. At that point, it’s only a small step to legal tender status. It’s safe to say this is something the IMF doesn’t want to see happen in any developed country, which is why the institution has seemingly focused its attacks on bitcoin
Lately, the IMF has centered around bitcoin’s energy use, with the IMF claiming CBDCs are superior because they use less energy. What the IMF won’t tell you is that bitcoin’s energy use is negligible in the grand scheme of things.
Wall Street
Anyhow, the fourth institution that’s trying to kill crypto is Wall Street, which is more of a collection of established financial institutions rather than a single entity. As almost everyone around the world knows, Wall Street’s power is truly unprecedented, and most of this power resides in a handful of asset managers like Blackrock and Vanguard and megabanks like JP Morgan and Bank of America. I’ll quickly note that the only reason these asset managers and banks were able to become so big is because they were basically first in line at the Federal Reserve’s money printer. They also have unbelievable influence over politics and regulations in the United States and elsewhere.
The SEC allegedly destroyed documents about the 2008 financial crisis when it was supposed to be investigating the asset managers and big banks that caused it. A 2012 article from the Huffington Post also notes that Wall Street spent more money on lobbying than any other industry between 1998 and 2011, a spending streak that has apparently been overshadowed by big tech giants like Meta and Amazon, which are now the biggest lobbyists.
The IMF even published a paper in 2019 about the regulatory capture of bank lobbying and how it led to the global financial crisis. While the authors argued that these issues were resolved by regulations, I think it’s clear to the average person that Wall Street has only become more powerful. Like the central banks at the BIS, the asset managers and banks on Wall Street do not want to be replaced by cryptocurrency, which is why most of them have historically been anti-crypto. The thing is that the asset managers and banks on Wall Street also don’t want to be replaced by central bank digital currencies either, and these are quickly becoming a bigger threat in crypto.
CBDC’s would effectively cut commercial banks out of the equation. Even though the CBDC systems being proposed by central banks often include commercial banks as the front end, the BIS and its central banks have admitted in multiple reports that it would be next to impossible for commercial banks to remain profitable under such a system.
What’s more is that the roles asset managers and banks play could easily be filled by companies in the financial technology sector such as Revolut and PayPal. You heard it here first, folks: crypto companies like ConsenSys could play this role.
This leaves asset managers and banks with only one option. That’s to take control of the crypto industry and leverage its technology to ensure they remain profitable and, ideally, leverage it to the point that they can continue to compete with fintech companies.
How are asset managers and banks taking control of the crypto industry, you ask? Besides investing heavily in centralized projects that have close ties to their own constituents, asset managers and banks are also taking control of crypto by forcing it to comply with their ESG agenda. It stands for environmental, social, and governance, and if you squint, you’ll realize that it really stands for control.
The inability to control bitcoin under this framework is ultimately why Wall Street dislikes proof of work. This is also why asset managers and big banks love proof of stake and why they are pushing for it. They have the capital they need to buy up the stake required to take control of almost any crypto project that uses proof of stake as its consensus mechanism. The same goes for token-based governance structures.
At that point, they will be able to implement whatever rules they see fit, and if everyone ends up using proof-of-stake cryptocurrencies, the asset managers and mega banks will finally have total control of the financial system, eliminating governments’ regulations and their own accountability.
That’s not to say that proof of work is perfect or that proof of stake couldn’t be improved, but it’s important to be aware of the game being played and the powerful people who are sitting at the table.
WEF
The fifth and final institution that’s trying to kill crypto is the World Economic Forum, or WEF, a non-governmental organization (NGO) based in Geneva, Switzerland. The WEF was founded by Klaus Schwab in 1971, and he has served as its executive chairman ever since.
As per its website, the WEF’s purpose is to quote shape global, regional, and industry agendas. The WEF has the power to do this because it consists of over 4,000 of the world’s most powerful individuals and institutions.
Its plans for the world are truly at odds with the average person. It has amazing ideas, such as you’ll own nothing and be happy, which comes directly from the technocratic brain of Klaus Schwab himself. You’ll also know that the WEF is where ESG standards were established and that the WEF’s recent annual meeting in Davos included a few crypto companies and personnel as well as a series of panel discussions about crypto-related topics.
As far as I can tell, the WEF has had cryptocurrency on its radar since 2013, which makes sense given that this is when the second crypto bull run happened. Naturally, the WEF isn’t all that interested in cryptocurrency. The WEF is interested in the powerful technology that cryptocurrencies use.
A historic example here is the WEF’s tipping points report from 2015, which highlighted smart contracts as a point of interest. It is important to note that this report was published shortly after ethereum was created and it even made a direct reference to the company that created Chainlink three years before it was created. A more recent example is this year’s Davos meeting, where the metaverse was almost as big a topic as ESG, with multiple discussions and articles produced by the WEF. Speaking of which, I’m pretty sure the second metaverse discussion was the longest of any discussion at this year’s Davos meeting.
Obviously, what the WEF wants is to use technology like blockchain smart contracts and the metaverse to create the dystopia its constituents want. Unfortunately, it seems like some crypto projects and companies are on board with the WEF’s vision of not naming names when it comes to blockchain.
The WEF intends to use it for things like digital id, social credit score tracking, and everyone tokenizing real-world assets so that ownership can be controlled and quote stakeholder capitalism can be engaged in via proof-of-stake consensus mechanisms. If you’re wondering who the stakeholders will be, Klaus has stated in many interviews and speeches that he created the WEF so that stakeholders could gather and let that sink in.
When it comes to smart contracts, the WEF wants to use them for things like automated censorship to prevent the purchase of certain goods and services and to create the kinds of incentive structures the WEF wants to see by artificially increasing meat prices to decrease meat eating.
When it comes to the metaverse, the WEF wants to use it to limit population growth to pacify people in developing countries and to give all the useless people something to do in the world of Yuval Noah Harari, one of Klaus Schwab’s closest advisors.
Luckily, the world is starting to wake up to what the WEF is trying to do with cryptocurrency and other technologies that are intended to free rather than enslave the average person. There’s no shortage of individuals and institutions who are starting to push back, including from the world of crypto.
Still, it’s scary to realize just how much influence the WEF and all these other institutions have, and it makes you wonder what other more powerful organizations are trying to do with cryptocurrency behind the scenes. Rest assured that I’ll be letting you know if I find anything. In the meantime, keep your eyes on these institutions and don’t hesitate to call them out.
[This article is a transcription of a video made by Coin Bureau]
[Original video: https://youtu.be/j97j3I2XVEg]
