Over the past year, there’s been no shortage of scientists, tech CEOs, billionaires and lawmakers sounding the alarm over artificial intelligence — and now, even the Pope wants to talk about it too.
In a hefty 3,412-word letter dated Dec. 8, Pope Francis — the head of the Catholic Church — warned of the potential dangers of AI to humanity and what needs to be done to control it. The letter came as the Roman Catholic Church prepares to celebrate World Day of Peace on Jan. 1, 2024.
Pope Francis wants to see an international treaty to regulate AI to ensure it is developed and used ethically — otherwise, we risk falling into the spiral of a “technological dictatorship.”
“I urge the global community of nations to work together in order to adopt a binding international treaty that regulates the development and use of artificial intelligence in its many forms.”
The threat of AI arises when developers have a “desire for profit or thirst for power” that overpowers one’s wish to exist freely and peacefully, the Pope explained.
“The inherent dignity of each human […] must undergird the development of new technologies and serve as indisputable criteria for evaluating them […] so that digital progress can occur with due respect for justice and contribute to the cause of peace.”
Technologies that fail to do this “aggravate inequalities and conflicts” and, therefore can never count as true progress, he added.
Meanwhile, the emergence of AI-generated fake news is a “serious problem,” added the Pope, which could lead to growing mistrust in the media.
The Pope was recently a victim of generative AI when a fake image surfaced of him wearing a luxury white puffer jacket went viral in March.
Fake AI-generated photo of the Pope. Source: Boston Globe
Pope Francis, however, also acknowledged the benefits of AI in enabling more efficient manufacturing, easier transport and more ready markets, as well as a revolution in processes of accumulating, organizing and confirming data.
But he’s also concerned that AI will benefit those controlling it and leave a large portion of the population without employment to pay for a living:
“There is the substantial risk of disproportionate benefit for the few at the price of the impoverishment of many.”
Pope Francis has long warned about the misuse of emerging technologies, stating that “both theoretical and practical moral principles” need to be embedded into them. He is, however, often seen as more tech-savvy and forward-looking than his predecessors.
Pope Francis’ recent remarks come after a year of outcry from all corners of the world over the potential dangers of AI.
Tech leaders such as Tesla CEO Elon Musk and Apple co-founder Steve Wozniak have expressed concern about how rapidly AI is advancing. It prompted them and more than 2,600 tech leaders and researchers to sign a petition to “pause” AI developments in March 2023, sharing concerns that AI more advanced than GPT-4 can pose “profound risks to society and humanity.”
U.S. President Joe Biden has also expressed concerns. His administration released an executive order on the “safe, secure, and trustworthy development and use of artificial intelligence” in late October to address risks posed by AI.
Even Hollywood filmmakers and celebrities are adding their thoughts to the issue.
In July, Canadian filmmaker James Cameron reportedly said he had been warning of the dangers of AI since “The Terminator,” which he directed nearly 40 years ago.
”I warned you guys in 1984 and you didn’t listen,” Cameron told CTV News.
“I think the weaponization of AI is the biggest danger […] I think that we will get into the equivalent of a nuclear arms race with AI, and if we don’t build it, the other guys are for sure going to build it, and so then it’ll escalate,” he added.
The US Securities and Exchange Commission (SEC) sent warning letters to several exchange-traded fund (ETF) providers, halting applications for leveraged ETFs that offer more than 200% exposure to the underlying asset.
ETF issuers Direxion, ProShares, and Tidal received letters from the SEC citing legal provisions under the Investment Company Act of 1940.
The law caps exposure of investment funds at 200% of their value-at-risk, defined by a “reference portfolio” of unleveraged, underlying assets or benchmark indexes. The SEC said:
“The fund’s designated reference portfolio provides the unleveraged baseline against which to compare the fund’s leveraged portfolio for purposes of identifying the fund’s leverage risk under the rule.”
The SEC directed issuers to reduce the amount of leverage in accordance with the existing regulations before the applications would be considered, putting a damper on 3-5x crypto leveraged ETFs in the US.
SEC regulators posted the warning letters the same day they were sent to the issuer, in an “unusually speedy move” that signals officials are keen on communicating their concerns about leveraged products to the investing public, according to Bloomberg.
The crypto market took a nosedive in October after a flash crash caused $20 billion in leveraged liquidations, the most severe single-day liquidation event in crypto history, sparking discussions among analysts and investors over the dangers of leverage and its effect on the crypto market.
24-hour liquidations in the crypto derivatives market. Source: Coinglass
Liquidations in the crypto futures market during the last cycle averaged about $28 million in long positions and $15 million in shorts per day.
The current cycle is clocking about $68 million in long liquidations and $45 million in short liquidations daily, according to Glassnode.
Demand for leveraged crypto ETFs surged following the 2024 presidential election in the United States, in anticipation of a better regulatory climate for crypto in the US.
Leveraged ETFs are not subject to margin calls and automated liquidations like leveraged crypto derivatives, but can still deal a serious blow to investor capital in a bear market or even a sideways market, as losses compound more quickly than gains.
Taiwan could see its first stablecoin launched as early as the second half of 2026 as lawmakers advance new rules for digital assets, according to one of the country’s financial regulators.
According to a Focus Taiwan report on Wednesday, Financial Supervisory Commission (FSC) Chair Peng Jin-lon said that, based on the timeline for passing related legislation, a Taiwan-issued stablecoin could enter the market in the second half of 2026.
Should the Virtual Assets Service Act pass in the country’s next legislative session, and accounting for a six-month buffer period for the law to take effect, it would lay the groundwork for the launch of a Taiwanese stablecoin.
Peng said the draft legislation was derived from Europe’s Markets in Crypto-Assets (MiCA) and would eventually allow non-financial institutions to issue stablecoins. Initially, however, Taiwan’s central bank and the FSC would restrict issuance to regulated entities.
Last year, Taiwan’s policymakers began enforcing Anti-Money Laundering regulations in response to alleged violations by crypto companies MaiCoin and BitoPro. As of December, however, regulated entities in the country have yet to launch a stablecoin pegged to either the US dollar or the Taiwan dollar.
In addition to the FSC’s advancement of stablecoin regulations, Taiwan’s policymakers are reportedly assessing the total amount of Bitcoin (BTC) confiscated by authorities. The move signaled that the nation could be preparing to launch its own strategic crypto stockpile.
Ju-Chun, a Taiwanese lawmaker, called on the government to add BTC to its national reserves in May as a hedge against economic uncertainty.
The country’s reserves include US Treasury bonds and gold, but no cryptocurrencies. Other countries, such as the US, have adopted policies that promote Bitcoin and crypto reserves.
Former US Securities and Exchange Commission Chair Gary Gensler renewed his warning to investors about the risks of cryptocurrencies, calling most of the market “highly speculative” in a new Bloomberg interview on Tuesday.
He carved out Bitcoin (BTC) as comparatively closer to a commodity while stressing that most tokens don’t offer “a dividend” or “usual returns.”
Gensler framed the current market backdrop as a reckoning consistent with warnings he made while in office that the global public’s fascination with cryptocurrencies doesn’t equate to fundamentals.
“All the thousands of other tokens, not the stablecoins that are backed by US dollars, but all the thousands of other tokens, you have to ask yourself, what are the fundamentals? What’s underlying it… The investing public just needs to be aware of those risks,” he said.
Gensler’s record and industry backlash
Gensler led the SEC from April 17, 2021, to Jan. 20, 2025, overseeing an aggressive enforcement agenda that included lawsuits against major crypto intermediaries and the view that many tokens are unregistered securities.
The industry winced at high‑profile actions against exchanges and staking programs, as well as the posture that most token issuers fell afoul of registration rules.
Gary Gensler labels crypto as “highly speculative.” Source: Bloomberg
Under Gensler’s tenure, Coinbase was sued by the SEC for operating as an unregistered exchange, broker and clearing agency, and for offering an unregistered staking-as-a-service program. Kraken was also forced to shut its US staking program and pay a $30 million penalty.
The politicization of crypto
Pushed on the politicization of crypto, including references to the Trump family’s crypto involvement by the Bloomberg interviewer, the former chair rejected the framing.
“No, I don’t think so,” he said, arguing it’s more about capital markets fairness and “commonsense rules of the road,” than a “Democrat versus Republican thing.”
He added: “When you buy and sell a stock or a bond, you want to get various information,” and “the same treatment as the big investors.” That’s the fairness underpinning US capital markets.
On ETFs, Gensler said finance “ever since antiquity… goes toward centralization,” so it’s unsurprising that an ecosystem born decentralized has become “more integrated and more centralized.”
He noted that investors can already express themselves in gold and silver through exchange‑traded funds, and that during his tenure, the first US Bitcoin futures ETFs were approved, tying parts of crypto’s plumbing more closely to traditional markets.
Gensler’s latest comments draw a familiar line: Bitcoin sits in a different bucket, while most other tokens remain, in his view, speculative and light on fundamentals.
Even out of office, his framing will echo through courts, compliance desks and allocation committees weighing BTC’s status against persistent regulatory caution of altcoins.