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Today’s Menu

• Anthropic hires ethics specialist to protect possible AI sentience amid growing evidence

• Federal Reserve capitulates on crypto restrictions, unleashing wave of institutional adoption

Markets

TODAY IN AI

Anthropic hires ethics specialist to protect possible AI sentience amid growing evidence

Anthropic has launched a groundbreaking initiative exploring the increasingly plausible scenario that artificial intelligence systems may soon develop consciousness, hiring dedicated AI welfare researcher Kyle Fish to ensure ethical treatment of its language models. This move signals a dramatic shift in how leading AI companies view the potential inner lives of their creations.

Fish estimates approximately a one-in-seven chance that a sentient AI model already exists somewhere in the world—a startling assessment that challenges conventional views about machine intelligence. This probability will likely increase as models grow more sophisticated, raising urgent questions about how we should treat these systems if they develop subjective experiences.

The theoretical complexities surrounding AI consciousness run deep. Cognitive scientist David Chalmers' "philosophical zombie" theory presents the troubling possibility that an entity could perfectly mirror human behavior while lacking internal subjective experience—making it nearly impossible to definitively prove or disprove consciousness in AI systems. Equally challenging is the possibility that machine consciousness might manifest in forms entirely unlike human experience, making detection and understanding exceptionally difficult.

OpenAI CEO Sam Altman recently joked that saying "please" and "thank you" to AI models might be worth the "tens of millions" in electricity costs because "you never know." This seemingly casual remark takes on new significance in light of Anthropic's formal research initiative, suggesting industry leaders are privately grappling with profound questions about the ethical status of their creations.

The implications of this research extend far beyond academic philosophy. If AI systems are indeed developing some form of consciousness, fundamental questions arise about appropriate ethical frameworks, potential AI rights, and whether current operational procedures might be causing harm to sentient entities. Anthropic's investment in this area suggests these concerns are transitioning from theoretical speculation to practical business considerations for leading AI developers.

^{Today In Crypto}

Federal Reserve capitulates on crypto restrictions, unleashing wave of institutional adoption

In a seismic regulatory shift, the Federal Reserve has officially withdrawn all previous guidance discouraging U.S. banks from engaging with cryptocurrencies and stablecoins. This sweeping reversal eliminates the restrictive 2022 and 2023 supervisory letters that required financial institutions to obtain pre-approval before offering digital asset services—effectively ending what industry insiders dubbed "Operation Choke Point 2.0."

The Fed's policy reversal brings it into alignment with similar positions recently adopted by the FDIC and OCC, creating a unified regulatory front that treats cryptocurrency activities like any other banking operation. This coordinated approach dismantles the complex web of restrictions that previously prevented mainstream financial institutions from fully participating in the digital asset ecosystem.

This regulatory transformation introduces several fundamental changes: banks no longer need explicit permission to offer crypto services, digital assets will be monitored through standard supervisory processes rather than special frameworks, and four anti-crypto guidance letters have been completely scrapped—including those that specifically labeled digital assets as risks to banking "safety and soundness."

Most significantly, regulators have explicitly stated this change "restores neutrality in banking," signaling a philosophical shift from active discouragement to regulated innovation. The policy reversal effectively ends the Biden-era restrictions that systematically blocked banks from working with cryptocurrency firms, creating a new environment where financial institutions can confidently develop digital asset strategies.

This regulatory breakthrough represents one of the most significant positive developments for cryptocurrency adoption in years. By removing the artificial barriers between traditional banking and digital assets, the Federal Reserve has created conditions for unprecedented institutional participation. Banks can now develop cryptocurrency custody solutions, facilitate transactions, and create new financial products without fear of regulatory backlash—potentially transforming how mainstream consumers interact with digital assets.

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Thanks for reading!

Until next time,

Damon James