July 22, 2019 • Bill Taylor
While lawmakers and regulators consistently cite criminals' and evil-doers' use of Bitcoin as a reason to “discourage” acceptance of the digital currency, they might want to instead consider the fact that crime was NOT invented when Bitcoin launched. It seems some recent research by Messari confirmed that BTC is not the financial threat critics like to claim. The United Nations Office on Drugs and Crime, along with data from Chainalysis, point out that good old fiat money is used 800 times more than BTC to launder money. Yup, that’s an 800:1 ratio and that only covers activity on the dark web and not through conventional markets, where it most certainly occurs as well. The U.N. study contrasts sharply with U.S. Treasury Secretary Steve Mnuchin’s recent comments that cryptocurrencies are a “national security issue.” To quote: “Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking. Many players have attempted to use cryptocurrencies to fund their malignant behavior. This is indeed a national security issue.” The U.N. study also mentions that Bitcoin may actually be more stable then fiat currencies, even with its inherent volatility. Note that the Fed has increased the currency supply by 13,664% more than BTC did in the last decade. Perhaps Mr. Mnuchin is a little misdirected to look at Bitcoin as the problem currency in supporting criminal activities (when it only accounts for a fraction of those transactions), and instead should focus on why the Fed is artificially increasing reserves to maintain economic policies within the financial system. Gosh, if criminal activity (money laundering, etc.) is such a big problem, why not just make it illegal? Bill Taylor is managing partner at Fintek Capital and a frequent contributor to Financial Advisor/FintekNews.
It seems some recent research by Messari confirmed that BTC is not the financial threat critics like to claim. The United Nations Office on Drugs and Crime, along with data from Chainalysis, point out that good old fiat money is used 800 times more than BTC to launder money. Yup, that’s an 800:1 ratio and that only covers activity on the dark web and not through conventional markets, where it most certainly occurs as well.
The U.N. study contrasts sharply with U.S. Treasury Secretary Steve Mnuchin’s recent comments that cryptocurrencies are a “national security issue.” To quote:
“Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking. Many players have attempted to use cryptocurrencies to fund their malignant behavior. This is indeed a national security issue.”
The U.N. study also mentions that Bitcoin may actually be more stable then fiat currencies, even with its inherent volatility. Note that the Fed has increased the currency supply by 13,664% more than BTC did in the last decade.
Perhaps Mr. Mnuchin is a little misdirected to look at Bitcoin as the problem currency in supporting criminal activities (when it only accounts for a fraction of those transactions), and instead should focus on why the Fed is artificially increasing reserves to maintain economic policies within the financial system.
Gosh, if criminal activity (money laundering, etc.) is such a big problem, why not just make it illegal?
Bill Taylor is managing partner at Fintek Capital and a frequent contributor to Financial Advisor/FintekNews.
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