Conversation

4) And instead, this time from CoinGecko's website, you have... USD. Neither where I am, where they are, use USD for fiat currency.

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5) Just to see what would happen, I tried a Japanese IP address, and set the language to Japanese. Then, CoinGeko showed me the volumes in units of... still USD.

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6) In fact, nearly *everything* in crypto is quoted in USD, regardless of the country or token. Volumes, prices, market caps -- all quoted in USD. Ask anyone what BTC is trading at; they'll probably say 47k--even if they spend a different currency when they go to the store.

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7) And, perhaps most importantly, it's not just a question of how crypto is quoted. It's also how trades. On Binance--the largest global spot crypto venue--the top 10 markets by volume trade against USDT or BUSD--both stablecoins tracking, well, USD.

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8) Every single futures contract on the top 5 futures exchanges is quoted in USD. Other than some small legacy futures on BitMEX, the spot JPY markets in Japan, and the spot KRW markets in Korea, every major crypto market is quoted in USD.

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9) ...And let's talk about stablecoins. Stablecoins are the settlement currency of crypto. The vast majority of trades--whether spot, OTC, or futures--are settled not in BTC, nor in wire transfers, but in stablecoins. And what are the largest stablecoins?

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10) Well, they're USD. _Almost entirely_ USD: >99%. The US Dollar is the world's currency, and right now it's also crypto's currency.

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11) Periodically someone will ask why there aren't more EUR stablecoins; and the answer is... ...Well, actually that would be kinda ok! But not _good_; in fact there would be fairly little point to it. Standardizing units is useful and clean, and the USD is the canonical unit.

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12) No one, when trading crypto, is primarily concerned with the fiat<>fiat volatility while moving fiat currency around the blockchain. Sure, you could move around USD, or EUR, or JPY, whatever, it's fine.

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13) Now, when time comes to cash out, people do care! Because they have what they're paid in, and want what they spend--both of which probably aren't USD if you're not living in the US. But _within_ crypto, USD is fine. There's no burning need for a different stablecoin base.

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50 Years After Going Off Gold, the Dollar Must Go for Crypto

14) All of which brings me to this Bloomberg article today:

bloomberg.com

After Richard Nixon scrapped Bretton Woods, the U.S. currency’s exorbitant privilege only grew — because the U.S. embraced innovation, not regulation.

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15) Now, I don't want to make too strong of a statement here! But, on the margin, right now there's something very *good* for the US happening in crypto: the industry has accepted the US Dollar as its unit of pricing and transfer.

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16) And I think that's somewhat robust! But not impenetrable. And if another country creates a massively more productive regulatory framework than the US, that could change. Which is one reason you're starting to see some places (e.g. Singapore) try to do just that.

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17) And it's one more reason that I'm thankful for the parts of the US crypto regulatory framework that actually work quite well. US spot crypto exchanges lead the world in terms of a blend of safety and frictionlessness.

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18) And the

has showed a compelling combination of flexibility, openness, and consumer protection when it comes to crypto derivatives. (Something I have definitely underestimated before; sorry about that!)

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19) We're in the early days of crypto regulation. A strong, clear licensing regime is necessary for the world at large to trust the system; and a flexible, understanding approach is necessary for innovation.

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20) It's a hard regulatory balance to strike in the easiest of circumstances; and crypto doesn't make it easy. The industry is moving quickly, and replacing swaths of financial infrastructure as it goes. And some of the early actors weren't exactly welcoming to regulators.

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21) But that's all the more reason that it's important to get it right. (For what it's worth: if any regulator wants color on something I know about in crypto, I'm happy to chat! And if you have feedback for us about our product, just reach out and we'll take action.)

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