6th April 2025 > > Tariffs, PayPal, & quantum computers.

tl;dr

PayPal responds to a more enlightened regulatory environment by extending its crypto platform. The quantum computing threat, if it does exist, is being dealt with already.

Market Snap

Market Wrap

The EU and China’s threat of tariff retaliation is the worst possible response, fuelled by a desire to appear muscular. China has long had implicit tariffs preventing imports (in the form of cheap labour and virtually non-existent environmental standards) whilst the EU has never made a secret of its desire to create an internal market protected by fortress-like restrictions on the rest of the world (just ask African farmers who are being sacrificed to protect French pride and sensibilities).

Stock market turmoil is likely not over. Will cryptos continue to decouple?

Occasional Series – Mumbai & short interregnum

Despite the WiFi problems – which I have sort of cracked – I feel duty bound to tell you I rate Mumbai most highly indeed. The people are very friendly, the food has been awesome, and it’s as safe a place as you could wish for, so long as you avoid the obvious bear-traps. Anyone living and working in Hackney is familiar with that skill. Sure, it’s super busy, and smelly in places, but aren’t we all sometimes.

But our time here is almost up. The Dalai Lama has requested an audience with the CCC to discuss how cryptos might help in his mission to restore democracy to Tibet. After my recent travails in China, I am more than happy to do my bit to topple dictator Xi and his murderous henchmen. For that reason, Dharamshala beckons. Now faced with a 27 hour (!!) train journey, the CCC must take a break for a couple of days.

Curious Cryptos’ Commentary – PayPal

PayPal has long had a crypto offering, though very limited in scope encompassing just BTC, ETH, LTC, BCH, and its own stablecoin PYUSD. The common thread is obvious – the first four were classified as commodities not securities even during the reign of terror under Warren and Gensler (BTC and ETH were approved for ETFs, and LTC and BCH are hard-forks of BTC and use the same proof-of-work consensus mechanism).

From a regulatory risk perspective, this was a sensible approach by PayPal, though business wise it limited their options to further build out its crypto revenues.

Now that the SEC has definitively moved from the Dark Ages into the Age of Enlightenment aka the Revolution of Hester Peirce, PayPal is taking advantage.

It has now added both SOL and LINK (two core holdings for the CC Treasury) to its platform, safe in the knowledge that regulatory clarity is forthcoming, and that the current iteration of the SEC will not pursue vindictive and spiteful campaigns against firms simply for the sake of it. May Zabaneh, PayPal’s Vice President of Blockchain and Digital Currencies, explains:

“Since we initially made cryptocurrencies available on PayPal and Venmo, we’ve been listening to our users about what they want to do with crypto on our platforms. One piece of feedback we’ve heard is to make additional tokens available that align with our mission of revolutionizing payments.”

As the press release makes clear, “PayPal is committed to providing cryptocurrency options in a familiar, trusted environment”.

Hester’s influence is already growing the crypto pie. Long may that continue.

Curious Cryptos’ Commentary – The quantum computing threat

Though the technology to crack SHA-26 and Elliptic Curve Digital Signature Algorithm, two core elements of the BTC ecosystem, is still years away, there are legitimate concerns about the threat to cryptos potentially posed by quantum computers.

Those concerns pale into insignificance when set against the other risks to humankind’s well-being posed by quantum computing. There are many other critical IT applications that will become vulnerable to quantum computers long before cryptos fall prey. The data breaches regularly experienced by public bodies, and some private ones, will become ubiquitous in the relatively near future, exposing our personal and financial data for exploitation by feral scumbag scammers. Financial institutions will suffer financial loss, which will have to be made whole with government money, to prevent another GFC-style banking run. Medical records will be readily available, and probably susceptible to malicious interference. Highly confidential and sensitive information held by governments will no longer satisfy either of those two criteria, putting the secret services and our armed forces into danger on a scale greater than the traitorous Edward Snowden could ever dream of (*).

Still, in a very narrow sense, we are concerned here with the impact on cryptos. And plans are already afoot to mitigate any risk from quantum computers.

A draft BIP (BTC Improvement Proposal) has been circulated entitled “Quantum-Resistant Address Migration Protocol”:

https://github.com/chucrut/bips/blob/master/bip-xxxxx.md

As explained in the Abstract:

“This BIP proposes a consensus change that enforces a mandatory migration period for funds held in legacy Bitcoin addresses (i.e. addresses secured by ECDSA as defined in current protocol rules) to quantum-resistant addresses. After a specified migration deadline, any transaction attempting to spend funds from a legacy address will be considered invalid. The goal is to mitigate the risk of quantum computing attacks which could, in a worst-case scenario, compromise private keys and allow unauthorized spending.”

This may not be the final answer to the potential conundrum posed by quantum computing, but it does demonstrate that this issue is being thought about. Call me complacent if you like, but I remain quietly confident that enough smart people are worried enough that a solution will be in place long before it is needed. Which shuts off another avenue for the naysayers to bang on about.

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It also has one other delicious side-effect.

Any solution is likely to involve a hard fork. There have been plenty of those in the past, such as the ones creating BCH and LTC that form part of PayPal’s crypto offering we discussed above. There are many more that have crashed and burned. BTC GOD anyone? BTC Platinum, BTC, BTG, SBTC, BCX, BCHSV, BCGHABC (a hard fork of a hard fork), the list goes on and on.

The key thing to understand about hard forks is that anyone can launch one, but gaining traction is the key to success or otherwise.

And until now, the maxis have been correct in their position that there is only one BTC, and all the hard forks are mere derivatives.

When BTC is hard forked once more to make it quantum resistant, the maxis will stick to the old chain, whilst the rest of the world moves on with QRBTC, which will become the gold standard. The maxis will be left behind, wailing and gnashing their teeth, as their extreme world view crumbles all around them.

Shutting up the maxis is as enjoyable as shutting up the naysayers.

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(*) My sources within the Kremlin inform me that one of Trump’s demands that Snowden be returned to the US to face justice as part of the Ukraine peace deal will be readily accepted by Putin, which is very cheering news. His Russian citizenship papers are destined for the dustbin. Next up to be jettisoned for political gain by Putin is the despicable Bashar al-Assad whose destiny mirrors that of Saddam Hussein, though his wife and kids will return to a life of luxury in London supported by money stolen from the Syrian people and blindly accepted by the UK establishment.