War in Ukraine Disturbs Crypto's Fantasy of Stateless Money 36 How are Your Crypto Assets Handled When You Die?

Crypto Weekly

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War in Ukraine Disturbs Crypto's Fantasy of Stateless Money

The recent executive order signed by Joe Biden was advantageous to the crypto industry because it did not include burdensome new regulations or take an adversarial tone.

Nevertheless, it pales insignificance when compared to another development-the international response to the Russian invasion of Ukraine. Its ramifications will be far more significant for crypto, and none of them are favorable. As evidence of the dollar's global dominance, Washington has imposed financial sanctions on Moscow, demonstrating its ability to damage foreign individuals, firms, and entire countries.

Having learned how the international monetary system works has been a teachable moment. People who were unaware of this have recently discovered that the dollar is vital for all kinds of international transactions and that disconnecting a country's central bank and commercial banks will make that country an economic pariah on a global level. Additionally, the public has seen that dollar "weaponization" can be successfully implemented in concert with dozens of like-minded nations for a noble cause. Despite cheering millions sympathetic to Ukrainian independence, the revelations clash with crypto's anarchistic fantasy of stateless money controlled by no central authority while ensuring privacy for its users, eventually replacing fiat currencies and eroding the dollar's hegemony.

The arguments of crypto skeptics have also gained strength. As a result of the education Congress members and their constituents have received in the last few days, it will be much harder for the crypto lobby, wellfunded as it may be, to make a case for encouraging the widespread adoption of dollar alternatives. Measures that challenge the dollar's primacy will be accused of aiding and abetting Vladimir Putin and his ilk.

Awareness of a new reality

Russia cannot evade sanctions by using Bitcoin, Ethereum, or other crypto assets. Such reports are grossly inaccurate. It is easy to imagine that crypto will enable some of Putin's cronies to move their own money undercover despite sanctions and capital controls. For an economy the size of Russia, it is not practical to transfer the necessary sums via crypto exchanges to conduct international trade. There is evidence that smaller sanctions targets, such as North Korea, also utilize these methods.

The president's directive for a coordinated policy to encourage "responsible innovation" and make the U.S. a leader in technology while also addressing threats to national security, financial stability, and crime prevention was welcomed by bitcoin supporters.

In the long run, the government's recognition of the significance of cryptocurrencies should be considered an endorsement, said Blockchain Association executive director Kristin Smith.

Crypto enthusiasts tend to be cockeyed optimists, as evidenced by such jubilance. Regulators and lawmakers in Washington are unquestionably moving toward prioritizing the three objectives in the Biden executive order: "Protect U.S. investors, consumers, and businesses...Mitigate systemic risk, mitigate illicit finance, and reduce national security threats."

Efforts to harmonize and coordinate digital currency regulations worldwide are enhanced by a united front against the Russian invasion. Cryptocurrency firms and exchanges have opened shop in Hong Kong, the Seychelles, and the Cayman Islands to ensure "light-touch regulation."

The Financial Stability Board, the Basel Committee on Banking Supervision, and the Financial Action Task Force, which have already advanced some proposals and are eager to tackle the issue more forcefully, will likely be able to threaten jurisdictions that fail to meet international standards with credible sanctions. 

Crypto Weekly

How are Your Crypto Assets Handled When You Die?

Crypto Weekly

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With a market cap of $3 trillion, set in November 2021, cryptocurrency's popularity has exploded in recent years. It can be confusing for those who have invested in cryptocurrency. This new asset represents a world where government regulation and industry best practices are nonexistent or lagging. Even if crypto is a new investment for you, remember to think long-term - and that includes planning for what will happen to your crypto when you pass away.

How Do You Select the Assets That Should Be Included in Your Trust?

Cryptocurrencies are digital currencies. Unlike centralized authorities (such as banks), blockchains serve as public ledgers that are independently verified by a network of computers rather than managed by a centralized authority.

Decentralized crypto assets are critical to include in your estate plan, and you should choose someone you trust to execute it. In other words, your beneficiaries may not be able to access your assets after your death.

Is crypto part of your estate plan?

Cryptocurrencies are considered probate assets, like your real estate property and other possessions you own. It would help if you went through probate (the legal and court-driven process of distributing your estate) before legally transferring it to your beneficiaries. Having an estate plan makes the probate process easier and faster.

Even the most popular crypto exchanges do not support beneficiary designations for crypto assets - such as transfer on death (TOD) and payable on death (POD) accounts, which are common methods to keep traditional assets out of probate.

Where is your money? Someone needs to know.

Cryptocurrencies are digital currencies, but you should still treat them as physical assets with value, like diamonds, precious metals, and cash. Anyone who obtains access to your crypto can use it to their advantage, or to their detriment. Decentralized assets have unique safety concerns that are absent in assets managed by centralized authorities (e.g., a bank or investment account). A crypto asset locked in a digital wallet that cannot be accessed if you die without giving someone your crypto keys - the random sequences of numbers and letters you use as your password for crypto - will likely be lost forever. It would help if you left your heirs with clear instructions on how to handle your crypto assets.

What is the best way to pass your crypto assets on?

Make your crypto assets part of your estate plan. The beneficiary of an asset is the person or organization you want to inherit it when you die. In your estate plan, list all the crypto assets you own, where they are stored, and which beneficiaries should receive them. If you own crypto assets, you should name a beneficiary and an executor in your will. You appoint an executor to administer your choices. Moreover, you can designate a separate digital executor to protect and preserve your digital assets and digital property. Nominate an executor or digital executor familiar with crypto to make the process easier for everyone involved. 