Even as Governments Around the World React Favorably
I want to share with you the latest of what's going on in the field of crypto. You've seen prices incredibly volatile this year, not the first time that's happened. This isn't a conversation about the price of Bitcoin. This is a conversation about the underlying technology and what's going on as we continue to see the evolution of this new asset class.
Global X ETFs, for example, has just launched the Global X Bitcoin Fund and the Global X Ethereum Fund, but you can't buy them. They're only available in Europe. This is a further illustration of how the United States is falling behind. You can buy a Bitcoin fund or an Ethereum fund in Europe. You can buy them in Canada. You can buy them in Australia. You can buy them in Japan. You can't yet buy them here in the U.S. There's no Bitcoin ETF. Why not? The FCC is dragging its heels on approval of a Bitcoin ETF. It's silly when you think about it, not only because the SEC has already granted approval to ETFs that are ridiculously more expensive than a Bitcoin ETF. For example, they have already approved a 3X inverse fund, a fund that borrows three times as much as you invest and then bets that the market's going to crash. That is certainly very risky. That exists, but not a Bitcoin ETF.
SEC Still Doesn’t Budge in Light of Support for Digital Assets Around the World and Even on the State Level
Forcing American investors to go to other investment strategies that are more expensive, less liquid, more cumbersome, less transparent. All because the favored investment vehicle, an exchange traded fund, is not yet available in the U.S., but it is now in Europe. And in Germany, for example, they've now amended their tax code. That makes Germany one of the most crypto friendly places on Earth for long-term investors. If you hold crypto for one year or more, all the profits are now tax free. More people own bitcoin in Germany than any country in the world except the U.S. and their population's a lot less than ours. By the way, my new book, The Truth About Crypto, is now being published in German and being sold in Germany.
The Shanghai High People's Court has declared that Bitcoin is a virtual asset that has economic value and is protected by Chinese law. This is the first time a Chinese High Court has issued a ruling concerning Bitcoin.
And in Australia they've approved a Bitcoin ETF. The Minister for Financial Services says the crypto industry has the potential to create hundreds of thousands of jobs and boost Australia's economic growth by 50%. The Central African Republic has adopted Bitcoin as legal tender. Honduras and Portugal are planning to adopt Bitcoin as well. Mexico says they're going to launch a digital currency by 2024. Clearly there is widespread growth and adoption of crypto on a global basis.
Further evidence of this? In the United Kingdom their Treasury has recognized Stablecoins as a valid form of payment. The UK Chancellor of the Exchequer says, "We want to see the businesses of tomorrow and the jobs they create here in the United Kingdom. And by regulating effectively, we can give them the confidence to think and invest long-term". The Minister has ordered the Royal Mint to issue NFTs. Yeah, the government in the United Kingdom is getting into the NFT business.
44 countries recently met in El Salvador to discuss Bitcoin. 32 central banks, 12 financial authorities. They talked about financial inclusion, digital economy, banking the unbanked, and rolling out bitcoin. Most of the countries that were participating in this meeting were developing nations: Nigeria, Egypt, Nepal, Pakistan, Bangladesh, Kenya, Uganda, Rwanda, Paraguay, Angola, Guinea, and Madagascar. Clearly, these countries see the potential of blockchain technology to improve their economies and improve the financial lives of their residents.
And Fidelity has now opened an office outside the U.S. Where? Decentraland. That's the metaverse. Users are going to be able to go online into the metaverse, walk through a Fidelity lobby, a dance floor, and a rooftop garden while learning about Fidelity's Bitcoin ETF, which is now available in Canada. MGM is selling concert tickets via NFTs. 1100 of them give buyers prime seats, free food and drinks, and meet and greet opportunities.
And what about here in the United States? What's our government doing? Well, first, let's take a look at what's happening at the state level. Virginia now allows state-chartered banks to provide custodial services for digital assets. The law is effective this July 1. The bill was passed with 100% of the legislators voting yes. In Oklahoma, the legislature is giving tax incentives to Bitcoin miners. Florida legislators approved a bill making it easier to buy and sell crypto. There are more than 150 bills in more than 40 states plus Puerto Rico to support, foster and develop the innovation of crypto. Mobile, Alabama. They're starting to do Bitcoin mining. Clearly, cities and states around the country get it. And in fact, the federal government is on board now, too. Janet Yellen, the secretary of the Treasury, gave her first speech ever on digital assets. She called it transformative. Also said a digital dollar could become "trusted money comparable to physical cash". She said, “I share the president's urgency in pulling forward research to understand the challenges and opportunities a central bank digital currency could present to American interests". That was Janet Yellen.
In the Senate, the Senate Republican Policy Committee has published a paper called “Crypto Goes Mainstream”. Republican lawmakers have called for innovation in the crypto industry, as well as regulatory clarity for consumers, entrepreneurs, and investors. One thing that has been holding back major corporations from buying Bitcoin is that they don't really know the accounting rules because there aren't any. So now the FASB is weighing in. That's the Financial Accounting Standards Board. These are the folks who set the rules for how big companies manage their books and records. And the FASB has now voted unanimously to create accounting rules for digital assets. You see, without the rules, companies don't know how to report their holdings of Bitcoin on their balance sheets. This has stopped them from buying. But with the rules once in place, corporate adoption will skyrocket.
Meanwhile, as I said, the SEC has not yet approved a Bitcoin ETF. That has caused two Republican members of Congress to blast the SEC for this. U.S. Reps. Patrick McHenry of North Carolina and Bill Huizenga of Michigan wrote to the SEC, criticizing its behavior and demanding that they say yes to a Bitcoin ETF.