Business

Erik Gibbs

US state secretary wants crypto transactions regulated too

Cryptocurrency just got a little bit of a boost, thanks to the U.S. Secretary of State. While the U.S. is apparently not yet ready to introduce wide-sweeping regulations for the Bitcoin ecosystem, Secretary of State Mike Pompeo wants to see crypto transactions regulated just like other digital financial transactions.

Pompeo participated in an interview with Squawk Box yesterday where he showed he has more than just a nominal understanding of how crypto works. He asserted that anonymous transactions present risks that could be easily mitigated through regulations, adding, “The risk with anonymous transactions is one that we all know well. We know this from 9/11 and terror activity that took place in the 15 years preceding that where we didn’t have good tracking, we didn’t have the capacity to understand money flows and who was moving money.”

Squawk Box host Joe Kernen brought up the grossly misguided assertion by Treasury Secretary Steven Mnuchin that crypto is used more often for illicit activity than is fiat – an assertion that has already been dispelled on numerous occasions – and wanted to know what the Secretary of State thought of this position. He didn’t exactly agree or disagree with the statement, choosing instead to take a politically-neutral stance, but added that anonymous transactions “would decrease the security for the world.”

While Pompeo showed some knowledge of the digital currency industry, his remarks also indicate that much more education is needed. Bitcoin was never meant to be anonymous – private, yes; anonymous, no. It has only been a bastardization of the Bitcoin concept that has led to certain blockchain projects launching in support of true anonymity. However, those that understand the real purpose of Bitcoin know that anonymity was not part of the plan.

Instead of Mnuchin’s desire to tighten the screws on the crypto industry in an effort to prevent it from expanding (which is well beyond the realm of possibility), Pompeo suggests a more moderate approach. By regulating crypto transactions the same way that electronic fiat transactions are regulated, the Bitcoin ecosystem will be able to grow – which is going to happen, anyway – and will be able to do so in a controlled environment that affords better protections. It’s ultimately an idea that true crypto fans have wanted since the beginning and one that would see better transparency for the industry.

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