Cryptocurrency: West Can't Ban Like China Did...

[grarpamp]

Why The West Can't Ban Bitcoin The Way China Did

https://bombthrower.com/articles/china-is-showing-us-what-it-would-take-to-ban-crypto/

https://en.cryptonomist.ch/2021/06/27/bitcoin-billion-users-2024/
https://bombthrower.com/articles/network-states-a-primer/
https://bombthrower.com/articles/could-facebooks-diem-become-fedcoin-by-default/

Only a complete “dictatorship of the proletariat” can kill Bitcoin

Evergrande is being called China’s “Lehman moment” and overnight the
PBC closed the loop on their clampdown on crypto with a total ban on
virtual currency transactions.

For those paying attention, however, China isn’t just moving against
crypto, they’ve been bringing their entire technology sector to heel.
They also stated that it is time to redistribute wealth from the top
tier of the nations wealth holders to the rest of the peasant class.

This isn’t a return to their Communist roots as much as it is a move
of self-preservation against rising internal powers. In the words of
my friend Charles Hugh Smith via some correspondence we’ve been having
this week “Xi has set out to crush the Network State”.

I said in my earlier Network State Primer about the coming tension
between Nation States and Network States: the former will go down
swinging.

    The power structures of the nation states won’t go gently into the
dustbin of history. They will go down swinging, over a transitional
era that may span decades or longer, similar to the centuries long
tensions between monarchs and the Papacy that shaped the transition
from the Middle Ages into the Renaissance.

China has decided to make their last stand of the Nation State, now.
Here at this moment in time. They will not bail out Evergrande, they
will allow their side of the Everything Bubble to pop, and they will
use the economic crash to make a final sweep of consolidation of their
power. They will make sure their Big Tech knows who is in charge and
that it is not them.

Over here in the West, recent regulatory jabs at crypto seem almost
enfeebled by comparison. The SEC forcing Coinbase to cancel a program
they hadn’t launched yet (so it makes no difference to their bottom
line), while bickering with the CFTA over who gets to regulate crypto.

The subtext to all this is we shall now see, and be forced to choose,
a path forward in the digital networked age:

    Behind door #1 we keep the nation state format of centralized, top
down control and escalating interference into both the economic and
private lives of its subjects.

    Behind door #2 is the coming tension between nation states,
network states and crypto-claves that I outlined previously.

Neither path will produce a serene and stable gilded age. They will
both be chaotic and volatile, Fourth Turning style transitions. The
former in the course of implementing then maintaining a totalitarian
dictatorship by force. The latter in the interplay and jockeying
between three disparate organizational dynamics, each with it’s own
centre of gravity (power), source of wealth and interdependencies with
the others.

China may be able to make option #1 work there, at least for awhile,
but would a China style technocratic dictatorship actually fly and
sustain in the West?

At first glance one may think so. The zeitgeist today seems to be one
clamouring for authoritarianism and collectivism. But upon deeper
examination this may only be the vocal minority of academia, media
pundits and Social Justice Inc. The majority of the population may
just be keeping silent out of pragmatism and sheer exhaustion from the
never-ending elitist sanctimony and cultural Marxism.

But the pushback against COVID authoritarianism, now made acute by
forced vaccinations and the ongoing threats of never-ending lockdowns
may finally be getting hints of non-compliance through to
policy-makers in the West. Australia has officially abandoned their
Zero Covid policy and vaccine passport mandates are incurring revolts
and in some places are abandoned.

What would it take for Western governments to ban crypto, reign in
ascendant tech platforms and more permanently abrogate all property
rights?

Western governments would have to go “Full China”

My worry under lockdowns was that Western governments pined for
China-style autocracy. And let’s call it for what it is: for a couple
years since all this started, they certainly tried it. To varying
degrees they continue to cling to the hope that they can remain
relevant in a 21st century world using technocratic methods developed
out of 20th century industrialism. Most policy makers are still
trapped in a mindset learned from an era of assembly lines and
cubicles. They think the only difference is it’s now digitized.

But the more I started thinking about this the more I realized how
unlikely this is in the realms of erstwhile liberal democracies.

For one thing, decentralized crypto currencies have already changed
the game  in the West in a way where there is no going back. It is
estimated that by 2024, there will one billion Bitcoin HODLers, and
that makes them a real constituancy.

Another reason is that we are at least nominally democracies, with
elections. That means our societal fabric has a particular
architecture very different from China’s. While elections have become
largely ceremonial ratifications of homogenous policy tracks,
contested between insular factions within political monocultures, they
at least show the overlords where the boundaries of their powers are.

Take for example the recent Canadian election, where Justin Trudeau’s
gambit to secure a majority failed and he’s stuck with another
minority government. The rising right-wing PPC party won no seats, and
yet, secured 5% of the popular vote, up from 1.62% in 2019, the year
that party formed. They blew out the Green Party at 2.6% and who has
been around for 35 years. Their performance caused much pearl
clutching from the MSM and there will be more going forward,
especially should the incumbent government continue with its
post-national, woke, collectivist aspirations.

The Chinese peoples have never been free. There’s never been a liberty
inspired revolution there, only a cultural (Marxist) one. People in
China have no constitutionally guaranteed rights, they aren’t even
citizens. They’re subjects. They will take it, at least for now,
because they’ve always taken it. As Charles put it in his emails to
me, their history is replete with

    “one bloody purge after another, of someone consolidating power
and then unleashing a Cultural Revolution to eliminate rivals, etc. If
crashing China’s bubble is the nuclear option, Xi is quite confident
he can push the pain level to 11 and most will accept it, those who
don’t will enjoy treatment as an honorary Uyghur.”

That’s not the case here in the West where there have been at least
two revolutions fuelled directly out of an impulse for liberty: The
French and the American. Even though the former went off the rails a
lot quicker than the latter did, it still happened and it is a stark
reminder of where things go when wealth inequality gets so out of
whack and the elites become so detached from reality (Charles thinks
this is where things are headed in the US, he may not be wrong).

For cryptos to be hit with a China-style ban, in their entirety here
in the West, governments would have to go Full China, complete with
total control over every aspect of every citizen’s life (China just
set limits on how much time you’re allowed to spend on Tik Tok, they
have social credit systems which meter your alcohol consumption, the
list goes on and is getting longer).

How long would that last here in the West? Either the citizenry would
move straight into the final hyper-normalization phase seen in the
Soviet Union before it collapsed (paraphrasing: “They pretend to
govern us and we pretend to obey”), or, the pitchforks and torches
come out almost immediately. Countries break up. Secessionists abound.
At least a few people face some Mussolini moments if not full on
Storming of the Bastille and a French Revolution style purging of
perceived elites. It would get ugly.

I’m not saying this is what would happen if Western governments banned
crypto, I’m saying it could happen in response to the kind of
dictatorship that would have to be imposed in order to ban crypto.

That also doesn’t mean that cryptos can’t go “risk off” (to use
Charles’ description) for awhile, even in lieu of a ban. Especially if
China allows the economic chips to fall as they may and that ripples
across the global economy (perhaps China is unleashing yet another
global contagion…. on purpose).

The way I see it, the tension in liberal democracies between nation
states and network states will be played out through their respective
monetary systems.

    The nation state’s fiat money will be digitized into CBDCs, which
will be specifically constructed to preclude wealth formation or
savings and almost certainly be the rails of Westernized social credit
systems,
    The network state stable coins (like Facebook’s Diem), which may
endeavour to extend the lifespan of fiat currencies and fuse with
CBDCs
    And crypto currencies founded on hard money principles that
catalyzed the entire decentralized revolution. These will exist out of
default because in the absence of total dictatorship and owing to the
demands of optionality, capital pools will have to go here (among
other places) out of self-preservation.