Stablecoins Threaten Banks, On Being Banned From Wise & Market Musings
Crown Compendium IV: Cryptocurrencies, exchanges and the future of finance.
An informal compendium of Market musings trade updates and personal insights
Up to this point, stablecoins have barely featured in these pages - not from neglect, but from prioritisation. Still, they’ve always sat quietly on the agenda. A recent reminder arrived unprompted with perfect timing, when I received an email from Wise informing me that one of my accounts would be deactivated. The reason: a portfolio held under my investment group had exposure to cryptocurrency - apparently an unforgivable transgression in the increasingly sanitised, compliance-first world of UK-domiciled payment processors.
An excerpt follows.
”Hello Benjamin,
After reviewing your Wise account information, we’ve decided that unfortunately we can’t offer our services to you going forward..
We’ve deactivated your Wise account.. We have noticed on the website that you had previously provided, CRASSUS INVESTMENTS PTY LTD, there was a portfolio with bitcoin investments…”
Just like that, I was required to nominate an alternative account to which the funds will be (hopefully) repatriated. A stark reminder that maintaining multiple accounts around the globe is prudent.
At a deeper level, this example invites a more interesting question. What explains such a severe response, given that, at least for now, holding cryptocurrency remains entirely legal in the United Kingdom? The answer, I suspect, has less to do with legality and more to do with control.
What follows may guide the reader toward an explanation.
American Bankers Association (ABA)
“Stablecoins are unique among digital assets in that they mimic commercial bank money and could disintermediate core commercial bank activity like deposit taking and lending.”
The user experience of crypto is, quite simply, superior. Having used USDt to pay my law firm in Argentina last year while preparing a property purchase, I was struck by the efficiency: an agreed amount transferred directly to the counterparty via a simple QR code scan - an instantaneous transfer without intermediaries (banks).
As far as the core functions of banking are concerned, depositing and transferring, traditional banks appear to hold no meaningful advantage over crypto-based rails. Settlement is faster, friction is lower, and counterparty certainty is higher.
Where banks retain an edge is not in functionality, but in privilege. The generation of yield on savings deposits remains largely the domain of the banking system, not because of a technological constraint, but because legislation continues to favour regulated intermediaries over open monetary networks.
International Monetary Fund (IMF)
“ The IMF recognizes that stablecoins and crypto assets could have implications for monetary policy effectiveness, financial stability, and capital flow management — especially as adoption grows.”
*emphasis mine.
Personally I see the above as a screaming advertisement for the benefits of crypto given that monetary policy effectiveness means debasing said money’s purchasing power.
**Update - Wise has since re-activated my account after I informed them I shall not be liquidating any crypto holdings and helpfully offered to transfer my entire holdings with them to a different bank. It appears that on review of losing the business of my account that they opted for discretion over valour.
Stablecoins may represent the most disruptive force in capital markets today. Accordingly, I continue to allocate capital deliberately toward beneficiaries, most notably select exchanges positioned to capture pecuniary interests in trading and derivatives volume and on-ramping as this architecture scales.
More to come, to keep abreast become a premium subscriber to The Royalty King’s Report.
Market Musings
The Australian dollar has appreciated almost 7% against the USD on a YOY basis.
Net capital flows into Australian financial assets have turned positive year-over-year, while higher gold prices lifted export earnings to roughly A$47 bn in 2024–25, despite physical production rising only modestly from ~290 T to ~300 T. An investor or entrepreneur with a source of income denominated in AUD currently can buy USD denominated assets at a 7% discount.
Gold however, remains a superior savings instrument. The graph below demonstrates that a US saver could simply avoid the weakness in currency cross/rates buy saving in gold and then, if necessary, convert the gold into the desired fiat currency.
Royal Ruminations
AI capex embeds asymmetric, potentially systemic risk: either margins compress at the platform level through over-investment, or capital downstream is abruptly withdrawn. In both cases, expectations are fragile, and even portfolios with minimal index exposure remain vulnerable to correlated, liquidity-driven sell-offs in the event leverage begins to unwind.
What happens if/when ETF capital flows switch from being the marginal buyer to the marginal seller?
Res Politica
I recently returned from Argentine Patagonia and was in the Chubut province when arsonists set fire to Parqué Los Alerces. Disappointingly, this has lead to a campaign of false accusations against Israelis and the resurgence of the spectre of something known as ‘Plan Andinia’: long-standing conspiracy theory alleging a secret plot to establish a new Jewish state in Patagonia.
The timing is uncanny given I’ve been reading ‘Iosi, el espía arrepentido’ which details the confessions of a federal agent sent to infiltrate the Jewish community in Buenos Aires to uncover details of this alleged plan. “Iosi” details how this was, in fact, a hoax and the information he gathered led to the bombing of the Isreali embassy and AMIA (Asociación Mutual Israelita Argentina) in Buenos Aires in 1992 and ‘94 respectively.
Media
An enjoyable conversation with Unemployed Value Degen. Steve’s Silver Tsunami theme is one I have invested in. US seniors collectively hold an estimated $75-80 Trillion. My investments to benefit from this theme are of my signature capital-light inflation-volume beneficiaries: JXN, FOA, ABX, WRB, JOE et al.
Hugo from Undervalued and undercovered offers insight into European small cap value stocks, I have allocated some funds in my personal account towards some names based on his research. He is set to launch a value-opportunity fund this year, which I eagerly await to review.
Wishing you all the best.
— Benjamin
The Royalty King
