What happens with you pair traditional with innovative? You get fireworks. The two collide like atom splitting neutron hitting the nucleus — sparks fly, and pinned-up energy is released.
Eventually, someone (probably a middle child) comes along with a peace offering that satisfies both parties (at least enough to make a go of it).
Coinbase (and other Centralized Financial CeFi platforms like it) represents that peace offering middle child in the cryptoverse. Using a CeFi approach, Coinbase provides a way into the cryptoverse that traditionalists can agree with.
There is a price to pay for being a peacemaker, however. There are rules, regulations, and restrictions that must be adhered to be a CeFi platform.
“Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth. That failure exposed the Coinbase platform to potential criminal activity requiring the Department to take immediate action including the installation of an Independent Monitor.” Superintendent of Financial Services Adrienne A. Harris
It means Coinbase (COIN) will pay a $50 million fine to the New York State Department of Financial Services (NYDFS) to settle charges that it was out of compliance with anti-money laundering laws. It is also required to invest $50 million over the next two years to improve its compliance program.
“Today Coinbase and NYDFS have come to an agreement to settle a NYDFS investigation, disclosed in our 2021 annual 10K filing, into our historical compliance program. Coinbase has taken substantial measures to address these historical shortcomings and remains committed to being a leader and role model in the crypto space, including partnering with regulators when it comes to compliance.”
Paul Grewal, Coinbase’s Chief Legal Officer
Centralized Finance (CeFi) is necessary for the cryptoverse. It offers a familiar (and somewhat safe) environment for people to begin their crypto journey. CenFi platforms will likely be an important Segway between traditional and digital for the foreseeable future.
CeFi and regulations
Regulation isn’t a bad thing; it is an essential thing. Regulations are the nature of the CeFi industry. They provide moderate peace of mind to investors that their money is protected. Such oversight is necessary because of greed-driven people willing to take advantage of unsuspecting investors.
“Given the significant risks highlighted by recent failures of several large crypto-asset companies, the agencies continue to take a careful and cautious approach related to current or proposed crypto-asset-related activities and exposures at each banking organization.”
Issuing digital tokens or holding them on their own balance sheets ‘is highly likely to be inconsistent with safe and sound banking practices.’ There are significant safety and soundness concerns with business models concentrated in crypto-asset-related activities.”
The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corp. (FDIC).
The ongoing argument is that Decentralized Finance (DeFi) is trustless because of smart contract coding that prevents financial manipulation. The concept is difficult for traditional regulatory agencies to wrap their collective heads around. How do you protect investors without regulations in place?
It is a catch-22 with no middle ground at this debate stage. The bottom line will be some form of regulatory measures placed on the cryptoverse. The peacemaker deal from the middle child has yet to reveal itself.
The cryptoverse is the future of everything
Still in its infancy, the cryptoverse is shaking everything from world art to banking, business, capital ventures, and more.
As the saying goes, we fear what we don’t understand; every one of these industries has naysayers and prophets of doom forecasting its demise. But the cryptoverse is here to stay.
Being created in a digital world, for a digital economy, cryptocurrency has shot to prominence like a titan missile. Its presence on the global scene cannot escape being noticed.
The misfortunes of 2022 are similar to changing dirty diapers or visits to the ER due to falling off of bikes or jumping out of trees. It is part of the maturing process. Analysts report that, removing the headlines of 2022, Crypto outperformed the financial market.
“While prices may be down, crypto has never been fundamentally stronger.”
Beth Canova Weiss Crypto Daily
How does this impact everyday people?
The world is transitioning (slowly) from a traditional mindset to a digital perspective, and the cryptoverse is in the middle of that transition.
Centralized finances(Cefi) — the traditional way of doing business, finds itself competing with Decentralized finances (Defi) — the banking segment of the cryptoverse. The battle will be brutal, but Defi will come out on top in the end — in the not-too-distant future. (That is not to say that Cefi goes away.)
The cryptoverse has opened up investment opportunities for everyday people. The path to financial freedom remains murky but more straightforward than three years ago. This path will continue to grow into a super highway as more everyday people discover the investment opportunities of the cryptoverse.
Centralized exchange platforms — like Coin base — will serve a purpose in this transition. It is a Segway between traditional and digital. The cost of doing business as a Centralized platform is complying with government regulations to stay in business. (This is not suggesting that compliance is a bad thing — only a necessary evil because of unscrupulous greed)
As the cryptoverse increases its global footprint, attracting more everyday people, the banking industry will be forced to change or risk being sidelined.
The transition has begun, and everyday people are learning about the cryptoverse. It is only a matter of time before the inevitable change takes place.
Until then, the wise investment is utilizing the platform you are most comfortable using — Centralized or Decentralized.
The everyday people community is coming and hopes to equip you for success.
The cryptoverse is for you. Join me as, together; we take the most unexpectedly incredible journey down the many paths it has to offer.
Disclaimer: I am not a financial planner, and therefore do not offer financial advice. I am an avid student of the cryptoverse who is willing to make available the things that I learn to everyday people willing to take a chance, change, and explore your financial freedom in the cryptoverse.
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