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Gov. Desantis Push To Embrace Digital Money Is Unaffected By The Recent Drop In Cryptocurrency Prices

Gov. Ron DeSantis hasn’t changed his mind about supporting a pilot programme that would allow Florida businesses to pay state fees in cryptocurrency, Despite recent price drops and overall volatility.

“We always want Florida to be ahead of the curve, and we see the potential for cryptocurrency adoption, so it makes sense to offer the option to pay state fees in cryptocurrency — regardless of how much it fluctuates in an arbitrary time period,” Christina Pushaw, a spokeswoman for DeSantis, said in an email.

Popular cryptocurrencies such as Bitcoin and Ethereum dropped sharply on Monday before rallying later in the week, but they remain well below their all-time highs set last fall after months of decline.

In his budget recommendations to lawmakers, DeSantis requested $200,000 for the Department of Financial Services to allow businesses to pay state fees with cryptocurrency.

“A lot of people have flocked to South Florida over this issue and so our view at the state government is, this is something we welcome and we want to make sure the state government is crypto-friendly,” During a press conference on Dec. 9 to announce his preferred budget, DeSantis said.

The price of bitcoin was $50,504 per unit on that day. On Monday, it dropped from a high of $42,943 on January 20 to a low of less than $35,000. It had risen to $36,334 dollars as of 1 p.m. Thursday. It reached an all-time high of $67,566 on November 8.

A $100 fine paid in Bitcoin on the day of DeSantis’ announcement would be worth $72 in the state’s hands-on Thursday. If paid on November 8th, it would be worth $54.

Ethereum had dropped from $3,909 on Dec. 9, when DeSantis unveiled his budget, to $2,452 as of 1 p.m. Thursday.

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According to Pushaw, the value of those cryptocurrencies has risen dramatically in recent years as their popularity has grown. Bitcoin was trading at around $5,000 in March 2020. If Bitcoin payments were still held by the government, they would be worth a lot more.

Nonetheless, she claims that the currencies’ extreme volatility isn’t a deterrent because they will become less volatile as they become more popular.

“Bitcoin and other cryptocurrencies are still relatively new and not widely adopted yet,” Pushaw wrote. “They are still in the price discovery phase, meaning that prices will continue to fluctuate as investors, regulators and users around the world influence supply-and-demand dynamics. Every day, more people around the world start buying and using cryptocurrencies. The more people own and trade an asset, including a cryptocurrency, the higher its market cap goes. The higher an asset’s market cap, the more difficult it becomes for any one investor to move the asset price. So as a general rule: the wider the adoption of cryptocurrencies, the less volatile their prices will become over time.”

Other government agencies, as well as the Legislature, are debating how to reconcile existing state laws and regulations with the relatively new use of cryptocurrencies.

On Tuesday, the Office of Financial Regulation (OFR) issued a cautionary statement to investors regarding decentralized finance, which is defined as unregulated financial services provided by a blockchain algorithm. Decentralized finance, or DeFi, connects cryptocurrency users to loans and other financial services, but the unregulated market is ripe for con artists.

“This evolution of financial services is not necessarily a bad thing and maybe a good thing, but before getting involved with a company or product in the DeFi market, take reasonable steps to understand the risks of this emerging blockchain-based technology and market,” OFR Commissioner Russell Weigel said in a statement accompanying the advisory. “The Office of Financial Regulation is committed to allowing innovation to grow and thrive while protecting Floridians from bad actors, but the best practice is to educate yourself before risking your money.”

Consumers should conduct their own research and due diligence, according to the advisory.“be wary of representations of full transparency and security and understand what the actual risks are.”

“There are no DeFi consumer protections in place. Users may have little recourse should a transaction go wrong, and the parties involved in the transaction could be located anywhere in the world,” the advisory adds.

However, as Pushaw clarified, the OFR advisory was not a warning about cryptocurrencies in general.

“OFR has issued a number of warnings on different types of scams in the past, so it’s not surprising OFR would also issue a warning on possible DeFi scams, given the rising popularity of DeFi among consumers in Florida,” Pushaw wrote. “But DeFi is not the only type of investment/product that OFR has issued a warning to consumers about, and the fact that scams exist in any given industry is not a reason to write off that entire industry as a scam. By that logic,’ nobody would be investing in anything.”