As stated in a recent post. There is a bill in California that would allow Cannabis businesses to pay their state taxes in stable coins. A move that would go a long way towards mass adoption. The issue as this adoption approaches, attention will turn to the cryptocurrency space.
NY Attorney General Letitia James said in a statement:
“Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds”.
So what does this have to do with the Cannabis Industry?
On the surface, very little. That is unless you take into account that the goal is to use cryptocurrency for the Cannabis Industry. Which is currently a cash only industry due to federal regulation.
USDT has been a mainstay in the crypto space for some time, a digital asset pegged to the US Dollar. This claim has come under more scrutiny in the space lately due to USDT falling below $1.00 USD on multiple occasions. The whole point of Stable Coins are they should keep their value aka stay stable.
Tether (USDT) is a cryptocurrency with a value meant to mirror the value of the U.S. dollar. The idea was to create a stable cryptocurrency that can be used like digital dollars.
Coins that serve this purpose of being a stable dollar substitute are called “stable coins.”
Tether converts cash into digital currency. To anchor or “tether” the value of the coin to the price of national currencies.
When news that USDT is being used to mask financial dealings, it becomes less likely government will okay it’s use. Especially for Cannabis which itself is still controversial.
We still have the issue of stable coins and the counter-party risk involved. Where companies that issues stable coins may or may not have the amount of USD or assets they claim to.
Click here for more on stable coins and Counter-Party Risk
This is where advocacy and activism come into play. The crypto/cannabis community have to do our part to show that issues like Bitfinex/Tether are not the norm. That crypto is a viable option for the future of the Cannabis Industry.
Stay Tuned…
Jason Nelson
Attorney General James Announces Court Order Against “Crypto” Currency Company Under Investigation For Fraud. (n.d.). Retrieved from https://ag.ny.gov/press-release/attorney-general-james-announces-court-order-against-crypto-currency-company-under
DE/Coindesk, N. (2019, April 26). Bitfinex Covered $850 Million Loss Using Tether Funds, NY Prosecutors Allege. Retrieved from https://www.coindesk.com/bitfinex-ny-prosecutors-tether-850-million-allege
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