We did it, no one else should

Ripple’s indulging itself in an entirely common business tactic here – insisting that regulation be used to protect it from competition. There’s an all too entirely uncommon correct response to such too – go boil your head. For it is through this very competition unprotected by regulatory structures which makes us all in this modern world so stinking rich:

Ripple, the world’s third largest digital currency, has urged British regulators to follow in the footsteps of Japan and implement new rules to end the “Wild West” days of the cryptocurrency market.

Ryan Zagone, head of regulatory ­relations at the transactions innovator and digital currency, called on UK regulators to strike a balance between “capturing risk and enabling innovation”. He highlighted three “pillars” for lawmakers to target in regulation: consumer protection, anti-money laundering and financial stability.

It’s a fairly naked call there, isn’t it?

The argument being that Ripple, however few short years ago it was, didn’t exist. Thus it should be possible for anyone to have the regulatory freedom to invent Ripple. But now that Ripple does exist and also that Ripple is one of the market leaders therefore regulation should appear to make sure that no one can do to Ripple what they’ve just done. Appear out of nowhere as an invention and sweep the board.

Heads go boil boys.

There is a larger point here too. Which is that human society has been subject to these manias often enough, South Sea, tulips, dot com and so on. And we just never know whether something useful is going to come out of them or not. Sometimes something does – Amsterdam is still the centre of the world’s trade in cut flowers, Amazon got funded. Sometimes not, as with the Mississippi Company which is useful today primarily as an example of what would happen if MMT ever really got going.

But the thing is we’ve got to let the mania run its course before we find out what is of value. In this case, we’ve got to wait until no one can launch a new crypto to take Ripple’s place before we find out whether any new crypto launched to take Ripple’s place is worth having. Rather than making sure that no one can launch against Ripple. And it is these new market entrants which drive the wealth of the modern world.

Or, as already stated, go boil your heads boys.

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6 COMMENTS

  1. My test for regulating trade is: how big, how often, how anonymous?
    I lost £1000 of Northern Rock shares. Meh. Lesson learned, do better investigation in future or just don’t buy shares. I bought a dodgy loaf of bread. Meh, buy somebody else’s bread or just look at the packet more closely.
    But a once-lifetime hundreds-thousands house purchase, or an anonymous taxi hire where a dodgy taxi blights “taxis” not “that taxi”, then I move towards regulation to protect the consumer. But definitely never to protect the supplier – they must suffer the effects of their mistakes or they’ll never notice they’ve made any mistakes.

    • What you want is “catastrophic insurance” for personal buying mistakes. But even home-buyers are protected by home inspection services, real-estate agents, and title searches by lawyers. Around here, all three professions suffer government regulation, all for the express purpose of preventing competition and not redressing bad service, as the professionals make hefty campaign contributions and the home-buyer does not. But branding and accreditation, by one of several sufficiently large firms that strive to defend their names, is still an alternative to regulation.

      Meanwhile, Uber solved the problem of hiring an anonymous and unaccountable taxi late at night, and regulation is being used solely to kill this solution. Elizabeth Warren’s brainchild, the massive and unaccountable off-budget Consumer Financial Protection Board, is vacuuming up huge amounts of personal credit data, has put a couple niche industries out of business, but has yet to protect its first consumer.