Guns, Drugs and Money [video](nytimes.com)
nytimes.com
Guns, Drugs and Money [video]
http://www.nytimes.com/video/business/100000003491301/in-colorado-marijuana-pot-industrys-banking-problem.html?action=click&pgtype=Homepage&version=timesvideo-heading&module=watch-in-times-video®ion=video-player-region&WT.nav=video-player-region
9 comments
Dealers need to transact with other legal vendors to their businesses. Landlords, utilities, horticultural supplies, etc etc.
Don't think it's really about gambling the profits as much as making sure there is a profit after everyone else is paid.
Don't think it's really about gambling the profits as much as making sure there is a profit after everyone else is paid.
Sure, but all those businesses will have to deal with large amounts of incoming cash, so they too will have an incentive to take bitcoin. The secondary businesses wouldn't even need to keep any bitcoin as they could use something like BitPay or Coinbase to immediately convert bitcoins to dollars.
But for the primary growers/dealers, having a way of storing their profits without the risk of robbery would be a huge benefit (and probably lower storage costs substantially)
But for the primary growers/dealers, having a way of storing their profits without the risk of robbery would be a huge benefit (and probably lower storage costs substantially)
would have lost some of their profits (in dollar terms)
No, not in "dollar terms," in "general purchasing power terms," there is not some parallel bitcoin economy where people can buy the things they need for bitcoin that doesn't take into account the bitcoin exchange rate with other currencies.
No, not in "dollar terms," in "general purchasing power terms," there is not some parallel bitcoin economy where people can buy the things they need for bitcoin that doesn't take into account the bitcoin exchange rate with other currencies.
Not sure why this is downvoted. The vast, vast majority of businesses accepting bitcoin for goods themselves are immediately converting to USD(or whatever) to cover their own overhead. Their prices are tied to the USD.
It's not just "overhead". The reality with BTC is that if you accept BTC, you're responsible for the basis of the sender, which is impossible to know.
Converting to fiat currency eliminates that risk.
Converting to fiat currency eliminates that risk.
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Instead of suggesting alternate ways to get money, perhaps some Congresspeople can be persuaded to enact a law to shutdown the Justice Department's program called Operation Choke Point and all similar programs that interfere with state approved businesses.
As a matter of law that's pretty hard. All the FDIC has to do, has been doing, is to threaten to put the bank under continuous colonoscopy.
Perhaps we would have been better off if the usual suspects hadn't turned a blind eye to the Administration's criminal behavior when it was only going after approved but entirely targets like payday loan companies and gun and ammo dealers. Dispensing with the rule of law turns out not to be so keen, yes?
Perhaps we would have been better off if the usual suspects hadn't turned a blind eye to the Administration's criminal behavior when it was only going after approved but entirely targets like payday loan companies and gun and ammo dealers. Dispensing with the rule of law turns out not to be so keen, yes?
Well, the FDIC can be legislated by the Congress and putting penalties for FDIC officers who fail to comply is just another line. The Administration is not all powerful. Also, removing funding tends to work.
"putting penalties for FDIC officers who fail to comply is just another line"
If by that you mean penalties on named officers, or certain type for a specific group, that's an unConstitutional bill of attainder.
At this point, given the multiple counterexamples in the implementation of Obamacare, I have no faith that general legislation, or officially removing funding would work. Or rather, it won't work until it's once again thinkable to impeach the President. (I initially appended "or political appointees under him", but Obama's is hardly the first where staffers who can't be touched by the Congress are really running things.)
If by that you mean penalties on named officers, or certain type for a specific group, that's an unConstitutional bill of attainder.
At this point, given the multiple counterexamples in the implementation of Obamacare, I have no faith that general legislation, or officially removing funding would work. Or rather, it won't work until it's once again thinkable to impeach the President. (I initially appended "or political appointees under him", but Obama's is hardly the first where staffers who can't be touched by the Congress are really running things.)
I too have little faith, but I still believe this is the time for trying.
I don't mean "bill of attainder", I mean specific penalties for officials that do not follow the law. I didn't think that fit under "bill of attainder". I'm not talking about no trial, but no sovereign immunity from prosecution in failure of duty. I could be wrong at how that works since it isn't my area.
I don't mean "bill of attainder", I mean specific penalties for officials that do not follow the law. I didn't think that fit under "bill of attainder". I'm not talking about no trial, but no sovereign immunity from prosecution in failure of duty. I could be wrong at how that works since it isn't my area.
Ah, that's a more promising angle, but:
We're talking about essentially an abuse in "prosecutorial" discretion, who the FDIC targets and who it doesn't, for what reasons.
Now, to make this work, the FDIC examiners have to make explicit threats, and people at the banks need to be able to testify to this without the threat the FDIC will destroy the for that....
To actually make it stick, the DoJ would have to prosecute, and this DoJ certainly won't. But maybe the next would....
I think, it's going to have to come down to a non-Democratic Administration that actually has serious cojones. Which is unlikely, but possible, e.g. http://thefederalist.com/2014/11/11/the-nation-needs-preside... (jump down to the 2nd section, "The Throne Made of the Skulls of His Enemies" :-).
And you're very right about trying this now. We don't want to wait until we're only left with extralegal recourse, that will not end well.
We're talking about essentially an abuse in "prosecutorial" discretion, who the FDIC targets and who it doesn't, for what reasons.
Now, to make this work, the FDIC examiners have to make explicit threats, and people at the banks need to be able to testify to this without the threat the FDIC will destroy the for that....
To actually make it stick, the DoJ would have to prosecute, and this DoJ certainly won't. But maybe the next would....
I think, it's going to have to come down to a non-Democratic Administration that actually has serious cojones. Which is unlikely, but possible, e.g. http://thefederalist.com/2014/11/11/the-nation-needs-preside... (jump down to the 2nd section, "The Throne Made of the Skulls of His Enemies" :-).
And you're very right about trying this now. We don't want to wait until we're only left with extralegal recourse, that will not end well.
Yeah, I guess it does come down to prosecutorial discretion and the DoJ.
At this point, I really worry because the next President seeing what the long line before him/her did, might just be worse in not following legislation. For example, there is no authority to delay implementation of laws, but I guess it will become the default.
At this point, I really worry because the next President seeing what the long line before him/her did, might just be worse in not following legislation. For example, there is no authority to delay implementation of laws, but I guess it will become the default.
I'm not sure how they do it but one of the dispensaries (in California) I use actually takes credit cards. I still pay cash because I don't really want it showing up on my statement. But they manage it somehow.
There are two ways they may be doing it:
1) they're mis-classifying their business as a flowershop (somewhat illegal and definitely against the processor agreement, but it's not likely that they'll get caught)
2) They're using a "cashless ATM" where you withdraw money from your debit account or credit cash advance in the form of a deposit receipt that the dispensary can then cash.
Neither of these are good solutions. It is not technically illegal (well, kinda) for cc processors to accept mmj purchases (and Visa and MasterCard are ok with it-but not Discover and Amex), however no cc processor wants to because the amount of paperwork they'd have to file to be in anti-money laundering compliance would loose them money.
I was working on a startup trying to find a solution to this, but we recently gave up, at least for the time being.
1) they're mis-classifying their business as a flowershop (somewhat illegal and definitely against the processor agreement, but it's not likely that they'll get caught)
2) They're using a "cashless ATM" where you withdraw money from your debit account or credit cash advance in the form of a deposit receipt that the dispensary can then cash.
Neither of these are good solutions. It is not technically illegal (well, kinda) for cc processors to accept mmj purchases (and Visa and MasterCard are ok with it-but not Discover and Amex), however no cc processor wants to because the amount of paperwork they'd have to file to be in anti-money laundering compliance would loose them money.
I was working on a startup trying to find a solution to this, but we recently gave up, at least for the time being.
Not one of the 450 MJ business owners I've talked with would use bitcoin. Lack of understanding is part, volatility is the big one.
Cashless ATM is popular but there are some other creative options too. Using a crypto currency for transactions is great but the conversation to/from USD needs to happen quickly
Cashless ATM is popular but there are some other creative options too. Using a crypto currency for transactions is great but the conversation to/from USD needs to happen quickly
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I wonder also if they're at risk of getting their money stolen by police. Would a carload of mercs be able to stand up to a single cop on the highway claiming the money by asset forfeiture?
Bitcoin.
Not an effective store of value, too volatile.
Plus, somebody has to trade the cash they get for bitcoin, and then they're responsible for the stack of cash they can't do anything with.
Plus, somebody has to trade the cash they get for bitcoin, and then they're responsible for the stack of cash they can't do anything with.
It's a bit too soon, but at some point, one of the large banks(probably coinbase or circle) will be issueing USD on the Bitcoin chain. At that time, the pot-shop will accept BTC, which will immediately convert into COINBASEUSD. Problem solved. Junseth articulated this pretty well: http://junseth.com/post/109579766177/the-blockchain-isnt-goi...
I'm unclear how you got from someone's blog post to "one of the large banks will be issuing..."?
Bitcoin is an amazing Payment Mechanism. But it's not a good unit of account, and possibly not a great store of value. As such, the solution to the problems posted in the parent will likely involve transmission of USD over the Bitcoin network. Banks will be the ones to do this.
When you say, "one of the large banks" I think of Chase, BofA, Wells Fargo, etc. And, my experience with these entities is that it takes 3 days for them to do ACH transfers (well, the originating account is debited ~immediately, but the destination account doesn't see the $ for 3 days). YMMV.
There are easy to use solutions on the market for accepting bitcoin payments and converting instantly to USD. Bitpay and Coinbaes both do this. On Bitpay it goes straight to your bank, on Coinbase you can do the same thing or even leave it on the site as USD to be withdrawn later. You can change the bank you're withdrawing to at any time.
Yes, laundering money through Bitcoin is surely the way to get the Federal Gov't to look on them fondly.
Too volatile and does not really solve the problem. You need to establish credit, be able to write checks etc. Bitcoin is not going to fix that.
BitShares does solve, or try to solve the volatility problem (with BitUSD) but that Blockchain is not big enougth yet, and credit is also not happening at the moment.
Bitshares does not solve the volatility problem: http://prestonbyrne.com/2014/08/17/dont-walk-away-run/
I dont really think the arguments in that blogpost are very good. BitUSD will give you a lot of stability compared to any other blockchain.
Maybe if the early adopters actually spent them into circulation, rather than treating them as an "investment", waiting for the "mainstream" to buy them at higher prices.
Most early adopters I know spend their Bitcoin at a reasonable rate (although they may purchase more to keep their reserves up).
Because the blockchain is the pinnacle of plausibly deniable liquidity.
Tumbling and trading through other blockchains seems like it should be pretty robust.
At least you have to be physically present to steal or lose cash.
[video]
http://www.npr.org/blogs/money/2012/12/04/166514067/episode-...
and I remember hearing another Planet Money podcast on bitcoin around the same time:
http://www.npr.org/blogs/money/2011/08/24/138673630/what-is-...
and thinking "why don't the marijuana growers just store their money in bitcoin?" Of course volatility is a big issue, but that can go both ways. Marijuana dealers saving profits in bitcoin in 2012 and before would have made even more in appreciation. Dealers doing so from 2014 would have lost some of their profits (in dollar terms)