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The country that banned banks from buying crypto is about to go bust. Cause or effect?
by suff 8y ago
The country that banned banks from buying crypto is about to go bust. Cause or effect?
- sn41 8y agoProbably unrelated. This crisis is due to aggressive lending to unreliable parties, leading to mass default. The Lehman analogy is apt and to the point.
- suff 8y agoI wonder if they fear higher liquidity in cryptos leading to lower liquidity in bonds.
- sn41 8y agoI have not seen a cogent explanation for the ban, other than their volatility. I suspect the ban is because of the fact that governments are wary of cash outflow from the country. This is a problem with developing countries, especially. I think probably crypto currencies are being equated with "hawala"[1]. [1] https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala
- UncleEntity 8y agoMy (off the cuff) theory is they want the money to stay in the banks and the reason is the same as for them getting rid of large denomination bills to make the friction of holding cash higher. Can't really recapitalize the banks if everyone has their money on some blockchain or in their mattresses.