Poulos is the executive editor at The American Mind. He writes often about how technology shapes society.
The Securities and Exchange Commission’s recent legal threat to Coinbase’s new interest bearing cryptocurrency account program has caused a stir in finance and technology. These two worlds have been closely intertwined for centuries, but due to the implications of digital tech, they now face off in a growing rivalry. Industry watchers expect that the Biden administration will launch regulatory offense towards cryptocurrency.
The stakes are far greater than mainstreaming cryptocurrency. Financial companies’ expansion into our private lives is being made possible by technology. This could lead to Americans being forced into a de facto credit system which punishes them for making decisions and even voicing opinions that are not in their favor.
Consumer finance is becoming more deeply embedded in digital technology at a rapid pace. A McKinsey survey has shown that more than three-fourths use digital payment platforms. Statista predicts that around two thirds of Americans will use digital banking by next year. One increasingly participates in the economy for the pleasure of the people who run its infrastructure. This gives those in charge the power to punish and shape one’s behavior. They are profiting.
We’ve seen web hosts, payment processors and other corporations take coordinated action to comply with government priorities in order to financially freeze disfavored businesses online. The removal from social media of a sitting president opened the doors to a system where all who have the ability to cancel or suspend accounts can do so at their own discretion and in unison. This logic has led from Stripe, taking Donald Trump away, to PayPal, blacklisting users to purify it’s user base.
It is easier to feed the beast: The more power these organisations have, the more punitive and arbitrary their ethical or ideological standards are. David Sacks, PayPal’s founder COO, has warned that the coordination of federal, financial, and technological power to punish its critics or perceived opponents is a violation of our core constitutional protections. A person who sees his social media and financial accounts shut down after being identified by the government as a subversive will not have any legal recourse.
The regime is able to monitor your online activity because of its vast resources that span Silicon Valley and the federal government. You are allowed to think, say, and do whatever it wants. Deviate and you will be shut down. This is the un-American logic behind the social credit system.
Americans won’t be able to stop their financial system being used to turn their country into an technological prison if it doesn’t offer a fundamentally different and better way of generating, saving, and exchanging wealth.
Bitcoin and other cryptocurrencies can be used to free Americans from the financial, psychological and criminal sanctions that are at the heart of this system. This gift is at risk if legislators and policymakers, starting at the state level to prevent Washington, Wall Street, and Silicon Valley from making cryptocurrency just another cog within the system they control, fail to establish regulatory and statutory barriers.
States must be made legal sanctuaries of cryptocurrency. Only by putting digital power in the hands and preventing the use of digital technology to refound America’s soft credit system, can we stop the use of digital technology. Our military and intelligence agencies have organized America’s technological progress around unaccountable, extralegal social control for generations. This system of future innovation is a burden on freedom and our flourishing.
While antitrust actions against giants like Amazon and Google are wise and just, they don’t give digital agency back to ordinary citizens or enshrine the law. The rapidly-emerging social credit system blurs the distinction between public and private; Americans need Bitcoin and similar to regain their digital destiny and not be entrusted to more private or government sector overlords.
It has been criticized by many and at its worst it is often referred to as a caricature. It can also be used to its detriment, just like any tool. It is essential for the architects of the social-credit system that new crypto be mined is limited and that all crypto transactions are tightly monitored and capped. All forms of crypto must also be incorporated into the single investment and regulatory environment that Washington, Wall Street, and Silicon Valley control.
Americans require the exact opposite: The right to purchase and produce computers that can mine Bitcoins and build data centers; to use and move cryptocurrency without any restrictions, reporting requirements or invasive monitoring; and to choose whether they want to use it as their own digital currency. Although federal laws would be ideal in this regard, it is imperative that they are implemented at the state level due to the hostile environment.
These laws will prevent Americans from having the digital power they need to escape the social credit system. If lawmakers are unable to protect Americans’ digital rights, there is no Plan B.
James Poulos ( @jamespoulos), is the executive editor of The American Mind. He is also a fellow at the Center for the Study of Digital Life. He is also the author of “The Art of Being Free” and “Human, Forever, The Digital Politics of Spiritual War”.