Christian Catalini pfp

Christian Catalini

@catalini

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106 Followers
Christian Catalini pfp
Christian Catalini
@catalini
Reminded of the timeless classic by Murphy, Shleifer, and Vishny on how the allocation of talent impacts economic growth...
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Christian Catalini pfp
Christian Catalini
@catalini
So while dollarization is pretty much the only use case with traction today, the industry should focus on applications that will survive at scale and won't undermine stablecoins' long-term potential in global payments. What could the US do to truly enhance dollar dominance? Swiftly implement regulatory infrastructure to integrate these new open networks into our 'money stack,' and foster a competitive, not concentrated, stablecoin market. That's how you lead in this critical new sector and make crypto networks the 5G of money.
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Christian Catalini pfp
Christian Catalini
@catalini
Several people have asked why I don’t see dollarization as a strong use case for stablecoins. While it’s currently driving adoption, and the idea of stablecoins reinforcing dollar dominance is appealing, the concept is fundamentally flawed. First, countries have the ability to make the widespread use of stablecoins very hard for consumers, and they will do so if any player gains significant scale. The reason this hasn’t happened yet is that stablecoins are still a rounding error. Libra was seen as a threat from the start due to its potential scale, and any stablecoin that reaches a similar level of regulatory attention will face the same treatment. Second, if you play this out, dollarization is a bug, not a feature. It will lead to new capital controls and won't help USD dominance. The first adopters will be the small economies facing hyperinflation—precisely the ones US Treasury is concerned about destabilizing.
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Christian Catalini
@catalini
Read the full piece: https://www.project-syndicate.org/commentary/crypto-regulation-us-election-trump-bitcoin-boosterism-gives-harris-an-opening-by-christian-catalini-1-et-al-2024-09
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Christian Catalini
@catalini
Thoughtful crypto regulation will require more than Trump’s pandering. This is a complex undertaking. Success will require much more than courting Bitcoin maximalists and simply allowing stablecoins to exist. Achieving this vision demands a robust compliance framework. At the end of the day, policymakers in Washington must come together and draft new rules, rather than trying to squeeze crypto use cases into laws from nearly a century ago. And the industry, for its part, needs to tackle the many problems that traditional financial services and crypto leaders have long ignored. A thoughtful crypto policy would prioritize builders over speculators. The upside, much like in the early days of the internet, is a technology that can restore competition to sectors that haven’t seen it in decades.
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Christian Catalini
@catalini
But installing regulators who are more sympathetic to the quick-profit mentality would hardly be an improvement. Crypto’s greatest strength – its ability to incentivize the construction of open networks – is also its biggest liability. As in the nineteenth-century railroad mania, cryptocurrencies have fueled the creation of valuable new infrastructure, but they have also been exploited by reckless actors to perpetrate scams and fraud. Sam Bankman-Fried being a prime example of someone who knew how to play the game within the existing, imperfect regulatory framework. Businesses engaging purely in speculation, or even outright scams, benefit the most from the current regulatory chaos. Worse, many who have proactively advocated regulation or tried to collaborate with regulators have faced enforcement actions, resulting in a loss of access to essential banking services.
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Christian Catalini
@catalini
Crypto Policy Needs to Empower Builders, Not Speculators— Crypto Policy Needs to Empower Builders, Not Speculators — If the United States is to lead in crypto and AI, it needs clear rules that recognize the value these innovations can bring to the economy. Unfortunately, neither presidential candidate seems to understand this. The cryptocurrency industry is going all in on November’s US presidential election. But for all the investment it remains unclear how either candidate would approach the issue and prioritize builders over speculators. To establish the US as a leader in this strategic sector, the next administration must first replace the current lineup of hostile financial regulators, led by U.S. Securities and Exchange Commission Gary Gensler, who has consistently rejected meaningful dialogue with the industry.
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Christian Catalini
@catalini
7/ Under “manager mode”, bad choices at the top—driven by poor information—slow progress, drive talent away, and set off a negative feedback loop that unravels the startup.
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Christian Catalini
@catalini
6/ Great ideas can come from anyone, and it’s the founder’s job to create an environment where they can surface and thrive. Managers who prioritize optics over results degrade information and idea diffusion and demoralize the most talented and entrepreneurial.
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Christian Catalini
@catalini
5/ AI will only exacerbate this problem by providing founders with better information and low-cost predictions, which, in turn, will make good judgment even more scarce! (Ajay Agrawal and coauthors books on the topic).
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Christian Catalini
@catalini
4/ What’s truly scarce is good judgment and decision-making based on the best available information. It is what will make or break a startup.
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Christian Catalini
@catalini
3/ The problem is not with delegation or managers per se, but with how information degrades as it moves through the organization. What may seem like an invitation to micromanage should, in fact, be viewed as an effort to “microlearn” and make better decisions.
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Christian Catalini
@catalini
2/ Or if you already have, rapidly rely on skip-level conversations to understand what your team is truly learning from the environment. As you scale, some founders—like @barmstrong and Musk—heavily prioritize talent density and skunkworks teams as the antidote.
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Christian Catalini
@catalini
1/ Startups are vessels traveling through uncertainty. PG’s “founder mode” is about fighting information degradation. This means not hiring people who have perfected managing up—much of big tech selects for this!—but have terrible judgment, ideas or ability to drive results.
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Christian Catalini
@catalini
The Wells Notice to Opensea underscores SEC Gary Gensler’s approach of regulation by enforcement, continuing his trend of targeting high-profile innovators rather than creating a regulatory framework that genuinely protects investors and consumers. What’s at risk? NFTs represent a breakthrough in digital market design, enabling the differentiation of digital originals from copies. Where markets were once nonexistent or flawed, an efficient one can now emerge. Creators are no longer forced to bundle content into subscriptions or offer it free on social media, hoping to monetize later. Yet, under the current regulatory environment, much of this potential is stifled by the threat of NFTs being labeled as securities. Ironically, creators seeking to build lasting value are most at risk, while bad actors chasing quick gains are favored. https://www.forbes.com/sites/digital-assets/2024/08/29/how-the-secs-attack-on-nfts-harms-creators/
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Christian Catalini
@catalini
What's the better solution? Encourage grassroots verification, like Community Notes, and move toward a federated system that maintains interoperability between apps and aggregators. We can still share and connect, but with transparent algorithms and filters that users choose.
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Christian Catalini
@catalini
Platforms wield too much power, and handing decisions to an oversight board is just decentralization theatre. Even with genuine efforts to distribute control—like we tried with Libra—getting it right all the time is impossible.
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Christian Catalini
@catalini
Platform moderation is a losing battle in any centralized system—mistakes are inevitable, no matter the good intentions. COVID content controls likely aimed to save lives based on the science at the time, but getting it right is very hard.
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Christian Catalini
@catalini
Security and cryptography experts have long warned that Telegram isn’t a safe app. End-to-end encryption is disabled by default and implemented in an idiosyncratic way—exactly the setup you’d expect if a state actor needed easy access.
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Christian Catalini
@catalini
Full article @a16zcrypto : https://a16zcrypto.com/posts/article/forget-antitrust-regulate-to-let-tech-disrupt-itself/
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