Crypto blues

According to american newspapers, the U.S. and Iran are the closest they have been to reach an agreement on the framework for the relationship going forward. Aside from the core items such as opening Hormuz and abandon the nuclear program, there is the issue of the Iranian frozen funds and the possibility of reopening the Swift platform so they can transact in US dollars. But the story today has to do with the alternative to that route. Bitcoin came of in 2007 as a permisionless, decentralized network that allows anyone to move money freely and allegedly, anonymously, across the world. Yesterday, U.S. treasury secretary Bessent announced the U.S. has frozen about $1 billion in bitcoin that belongs to the Iranian government. Think about that for a second. If it’s permissionless, decentralized and anonymous, how is it possible they have been able to do that? Well, it seems that if you connect directly to the Bitcoin network and store your Bitcoin on a flash drive, you can benefit from those characteristics that Bitcoin offers. But if you use a wallet, such as the one they coinbase or binance offer, or an ETF listed on the market, then you gain security and easy of use, but it appears you lose the decentralized and permissionless benefits, and the U.S. can police and seize those funds. When the U.S. froze Russian assets in U.S. dollars at the beggining of the Ukraine war, everyone thought bitcoin was the solution to the problem. Now, it’s not that clear. Perhaps that’s the reason why crypto has not gone up recently as much as one would have thought. Perhaps that’s also the reason why central banks, particularly China, prefers to hoard gold, instead of crypto. Is the new monetary order going to be the oldest one again?

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