trad fi v de-fi (transposed)12 Dec 2022 16:11
A note came through my brokerage account this week.
It said that “**********, a custodian we and a number of UK stockbrokers use, have announced they will no longer support international Cannabis-related stocks…”
The note goes on to say they (********) had decided the cannabis-related stocks, “no longer meet the admission criteria to trade.”
The outcome of all this is that through the stockbroker, the trading or holding of cannabis-related stocks will not be permitted.
Furthermore, I am left with three options.
1,Do nothing. If this is the option, any cannabis-related shares will be sold (whether I like it or not) and the cash put in the cash account.
2.Sell any cannabis-related shares.
3.Transfer the holdings to another provider.
You read that correctly. Anyone holding cannabis-related stocks is basically now being forced into selling their stocks. The company says you can transfer them, but Euroclear deals with loads of UK brokers, so that could well be nigh impossible.
This is a classic example of authoritarian rule in the traditional financial (TradFi) system.
Someone at ********8 decided cannabis-related stocks isn’t something that meets the company’s admission criteria. If it gave a detailed explanation, then it hasn’t made its way via my broker to me. Now that the decision has been made, you, the investor, have to suck it up and deal with it.
If you don’t like it – too bad.
At some time over the next three years, there will be a huge shift in the world’s financial markets.
It will become patently clear what are the deficiencies of the TradFi system. It will also become obvious that DeFi solves the problems.
The consequence will be a rise in the DeFi system – and an existential threat for many of the middlemen and current providers of infrastructure in the TradFi system.
DeFi will defy TradFi, as you will see.
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