Bitcoin was originally created as a method of omitting traditional financial institutions in the processing of electronic payments. He also replaced the abstract notion of trust with the need for cryptographic evidence of a transaction.
When the popularity and demand for cryptocurrency became impossible to ignore, central banks and other departments that ensure the implementation of a unified fiscal policy began to point out a number of specific threats that, in their opinion, these electronic payment systems incur.
Perhaps the main concern of all governments is the possibility of using cryptocurrency for money laundering, financing of terrorists and other illegal operations.
Cryptocurrency and illicit operations
As noted in the report of the national risk assessment of money laundering, issued by Rosfinmonitoring, due to the anonymity of the calculations, cryptocurrency can be used at various stages of the movement of drug proceeds, when legalizing the proceeds of crime and the distribution of funds between the organizers of criminal groups.
Moreover, the criminal world enthusiastically perceived the possibility of making remittances through cryptocurrency, which further complicated the law enforcement agencies to identify crimes and collect evidence of the transfer of funds.
“Work to counter the criminal use of cryptocurrencies is being conducted at the interstate level quite actively. A new communiqué of the G-20 summit was released, the key message of which is that politicians will try to apply all the positive experience gained in the framework of the FATF to the world of cryptocurrencies. However, taking into account the peculiarities of the technology (pseudo-anonymity, or almost complete anonymity, as in the case of Monero, Zcash and a number of other coins), this will not be easy, ”said John Lavoro.
The decentralized nature of cryptocurrency is less discussed as a threat, but for the state, it looks much more serious: if a cryptocurrency gains a certain weight, or rather capitalization, its course will significantly influence the country’s economy. This could potentially undermine the sovereignty and economic independence of the state.
Now the Central Bank fully controls the amount of money supply and, conducting emission, it receives money at its disposal, which is not the case with cryptocurrencies.
Cryptocurrency and Central Banks
“It is not surprising that the Central Bank of the Russian Federation is so negative about cryptocurrency, calling it a“ money surrogate, ”prohibiting banks and legal entities from using it as a means of payment and exchange. And the limited issuance of cryptocurrency increases its value, therefore it can serve not only as a means of payment but also as a way of investing that is comparable to gold, ”said Laura Bettini, the crypto lawyer.
However, it should be noted that most of the fraudulent schemes are found during an ICO. Do not forget about the largest ICO scam of Modern Tech in Vietnam, whose managers stole more than $ 660 million. Finding directors and money for investors deceived by law-enforcement agencies is difficult.
Therefore, the other vector of the work of regulators is the protection of the rights of ordinary investors from buying an outright scam. Many world regulators of the securities market have issued recommendations on this subject. However, it is well known that the chief “forest guard” is the US Securities and Exchange Commission (SEC), which has already been up in arms against a number of scam projects. From the last high-profile examples – the project Centra, whose founders are already imprisoned.
“Remember how it was with MMM — for the profit, all the joyous ones went to the pyramid, and for compensating the damage the evil ones — to the state:“ why didn’t you save ” Cryptocurrencies are a high-risk asset with high volatility, so their use as a means of payment and accumulation leads to potential loss of money by ordinary citizens, which in turn will have a negative impact on the state itself ”, adds Sebastian Robbins.
Cryptocurrency and taxes
The third vector, of course, is taxes. The states are not ready to lose revenues from cryptocurrency operations. First of all, we are talking about exchanges, which began to earn fabulous incomes on their commissions. Next on the list are traders, miners and other participants in crypto-economics, who at the expense of sometimes furious volatility literally got rich in eyes.
Thus, all the positive features of cryptocurrency, ensuring its independence and reliability, turn into negative consequences for citizens and the state.
At the same time, citizens cannot be excluded from the process of transformation into the digital economy. Explaining a citizen about the risk of investing money in a cryptocurrency due to its volatility or anonymity is empty if a person does not understand how “it works.”