  Exploring the transformation of value in the digital age By Michael J. Casey, Chief Content Officer August 27, 2021 If you were forwarded this newsletter and would like to receive it, sign up here. Sponsored by 
In this week's column, I dive into porn, bankers and the crypto alternative to abuses of power.
A message from ForUsAll  Digital currency in your 401(k)? Now you can and why you should
Don't Let Bankers Censor Porn. It Hurts Democracy  Gabby Jones/Bloomberg via Getty Images It might seem a stretch to invoke a philosopher of the Enlightenment for a cryptocurrency column about an online subscription service being pressured to remove porn from its site.
But Baron de Montesquieu's core argument for the "separation of powers" is made for situations like this.
You see, the real bogeyman in this past week's OnlyFans porn saga – in which the platform initially said it would evict more hundreds of thousands of creators from its site and then abruptly reversed course to declare it would keep them – is not the popular site's corporate owner, or even the banks that reportedly pressured it to remove the content. It's the state.
Until the decision reversal, this was shaping up as an especially ugly case of government overreach. In allowing – actually, encouraging – financial gatekeepers to act as self-appointed sheriffs for a field of commerce that's in all other respects entirely legal, the U.S. government was exercising something that greatly bothered Monteseqieu in 18th century France: arbitrary power.
Checks and balances
Think back to those Poli-Sci 101 classes on the separation of powers. The executive branch, with its police, prosecutors and regulators, executes the law. But it doesn't create it. That's the job of the legislature, which is in turn denied the authority and the weapons needed to enforce the rules it makes.
What you're supposed to end up with is the Rule of Law, which makes everything nice and predictable. Only activities the legislature has deemed illegal are restricted by the state. It has no authority to act against anything that lawmakers haven't outlawed.
However, in our modern financial system, which gives banks the power to issue credit, manage payments and, ultimately, create money, there's a flaw in this design.
These privately owned institutions are uniquely positioned to control people's behavior. Until the arrival of cryptocurrency, it has until now been virtually impossible to engage in non-cash commerce without the blessing of a bank. But banks themselves are beholden to government influence, mostly because they are so tightly bound by compliance rules set by statutes such as the Bank Secrecy Act, the Dodd-Frank Act and Sarbanes-Oxley. This essentially makes them agents of the State's interest.
This is why the OnlyFans flip-flop offers a glimmer of hope. While the reversal was no doubt motivated by fears of losing revenue – most of the more than $1 billion projected for this year is expected to come from porn – it's important OnlyFans did so after it "secured assurances necessary to support our diverse creator community." This suggests the bankers had secured assurances from authorities they were not going to run into compliance problems.
We'll probably never know what discussions took place for all the parties to shift their positions, but it's worth speculating whether the recent emergence of a peer-to-peer payment alternative forced their hand. Cryptocurrency may not have directly come to the sex workers' rescue, but the very idea they could use it in lieu of credit cards, quite possibly contributed to what, in my view, was a victory for free speech and the Rule of Law.
Continue reading the full column here.
Off the Charts COVID-19 Boosts Mobile Payments I lifted this chart from a report in English put out by the mostly Arabic crypto site BlockArabia, though it seems the true source of the analysis and forecasts is Statista. Either way, it suggests there's an underlying trend in payments behavior that might also be conducive to cryptocurrency adoption.  The report said the number of people worldwide using mobile payments rose by 425 million last year and the dollar value of mobile transactions leapt $881 billion over the same time. This dovetails with a separate report from Upgraded Points showing a large drop in cash transactions during the pandemic – despite a massive global expansion in the circulation of banknotes from central banks.
It seems likely that as the impact of the coronavirus pandemic eases, the rate of growth in mobile transactions will slow somewhat. Even so, the projected expansion is still significant. If, by 2023, there are 1.7 billion people using wallets and mobile banking services, that's a lot of people who are one step closer to using cryptocurrencies.
The Conversation D.C. Fallout  Illustration: Rachel Sun/CoinDesk The battle crypto lobbyists waged in the U.S. Senate earlier this month to amend over-broad language in the infrastructure bill has now moved to the House. Already, the crypto community suffered a major setback this week when the House voted to disallow the addition of any new amendments to the bill before it is put to a full vote. That means the provision imposing draconian reporting responsibilities on cryptocurrency businesses remains intact.
In the absence of an extraordinary developments, it would appear that when the final House vote is cast on Sept. 27, lawmakers will assess the Senate's version of the bill, which contains the deeply flawed crypto reporting provision that remained unamended after a huge lobbying effort was foiled by a single holdout "no" vote by Alabama Republican Richard Shelby.  One of the things that's been frustrating for crypto advocates is how poorly understood the issues are. Here, venture capitalist Mike Matsumura points out that Politico's coverage of that procedural vote totally misinterpreted the core issue. What's contested is not that exchanges need to report to the IRS but that the definition of the types of "broker" entities covered by this requirement is too broad and could include non-exchange actors such as miners and developers.  Crypto lobbyists are not giving up. But it may be that they have to give up on the infrastructure bill and seek to improve crypto regulation via other legislative means. What most want is an end to ambiguity. As Coin Center Executive Director Jerry Brito explains in this thread, just hearing assurances from the Treasury Dept. that it won't go after miners isn't enough when there are still so many unanswered questions about how the law will be interpreted.  The stakes are high. Michelle Bond, CEO of the Association for Digital Asset Markets (ADAM), tweeted out a choice quote from a former Treasury official that pointed out how intelligence officials are now getting worried the clumsy language will drive bad crypto actors deeper into the shadows.  What's clear is the fight will continue in Washington. Readying for that, Fight for the Future has created a handy scorecard on lawmakers' positions on cryptocurrency. 
A message from Coindesk  Our Bitcoin for Advisors event is back for the second year to equip investment advisors with the tools to best understand how bitcoin, ethereum and other digital assets can successfully impact their clients' portfolios. CoinDesk works with the leading investment professionals in crypto, blockchain and traditional markets including Tyrone Ross, Morgen Rochard and Adam Pokornicky to design a series of keynotes, interactive roundtables and priority-driven workshops that are relevant, valuable and actionable for the advisor community. Join us for the first time in person at Bitcoin for Advisors on Oct. 6 to connect with over 300 investment advisors who are leading the way toward the future of investing. For accredited advisors on an application basis. Register today.
Relevant Reads Bored Apes  The crypto zeitgeist is now well and truly centered on the non-fungible token market. This week, the buying frenzy around NFT-backed digital art collections with names like Pudgy Penguins and Bored Ape Yacht Club intensified as sales volumes reached new highs.
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