Saturday, November 21, 2015

Split opinion between EU and UK about Bitcoin's risk

The price of Bitcoin is still vulnerable. It was rocketed a couple of weeks ago. Fortunately, Paris attack seems not to affect its trend.

The EU is planning to crackdown on the use of crypt-currency such as Bitcoin, after the terror attack in Paris last weekend. It intended to “strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards.”

Reuters: EU clamps down on bitcoin, anonymous payments to curb terrorism funding

The ministers were gathered in Brussel on Nov 20th, 2015, to agree with the policy of controlling the flow of several methods to move money anonymously. They include digital currency, pre-paid cards, and gold. EU sets sights on virtual currencies

Indeed, ISIS and other extremists are frequently using newly developed technology, SNSs as well, to gather money and collaborate with each other internationally.

Crypt-currency is a scheme intrinsically free from regulation by the government. Thus, it is suitable for anarchism. It is unavoidable that terrorists and other criminals are fond of using Bitcoin.

On the other hand, Bitcoin is not deemed as a method good for money laundering, according to the UK government. Government publishes anti-money laundering assessment and commits to action plan

The UK is one of the friendliest countries to Bitcoin. It declared to invest a large amount of budget to the research of blockchain, the key concept of Bitcoin. And the result of its investigation was that digital currency had lower risk than banks and other agents of being used for money laundering by terrorists.

HM Treasury and Home Office: UK national risk assessment of money laundering and terrorist financing

Actually, Bitcoin enables us to trade money under complete anonymity. However, exchanging Bitcoin for real money is not safe for illegal traders. Also, the transaction of Bitcoin is entirely recording in the blockchain. It means that the police can trace the whole process of the operation, potentially. I do not think Bitcoin is risky in terms of encouraging illegal activities very much.

On the contrary, it is difficult to regulate the trade using digital currency. A global regulation is necessary to control virtual trades, and it seems not to be feasible.

It is unsure whether the decision of EU will be an obstacle to the traders.


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