If there is one thing that criminals aspire to, it is unknown. The ability to lock up their illegal activities behind layers of privacy – or just like everyone else – gives bad actors an advantage in every arena. Terrorists, in particular, use layers of anonymity and negligence to fund their activities, allowing them to grow their ranks, form plans, and carry out attacks. Traditional finance cannot slow down the growing terrorist threat; only cryptocurrency can stop it in its tracks.
Blockchain technology-based money is money that has an open public ledger – an accessible running list of every transaction ever made. For example, anyone can search the Bitcoin blockchain to see which wallets sent currency to which wallets, how much that transaction was, and when it happened. Bitcoin wallets known to belong to terrorist organizations, terrorist funders, and other non-business parties can be flagged and blocked from making and receiving transactions.
Cryptocurrencies offer the only way to truly assess and intervene in money laundering, terrorist financing, human trafficking, and so much more. The idea that cryptocurrencies present more risk is a misleader; fiat currency has been the traditional method of financing crime, and cryptocurrencies have always presented a greater risk to criminals who would prefer to remain anonymous. The vast majority of crimes were funded by fiat money – digitally and in the form of cash – because fiat money offers an opportunity to remain anonymous and unclear.
Recent guidelines offered by the Financial Crime Enforcement Network (FinCEN) further sharpen the tools that cryptocurrency offers, requiring all cryptocurrency wallets to be attached to a verified identity. While this would be useful for tracking cryptocurrency transactions, it is not required; whether or not a cryptocurrency wallet is attached to a publicly validated identity, researchers can still quickly and easily determine who controls a cryptocurrency wallet by monitoring its use only, commonly referred to as “analysis blockchain transactions. ” Unregulated, the cryptocurrency industry has so far been self-policing, with many cryptocurrency companies moving to block wallets known to belong to criminals, scammers, hackers, terrorists and more.
As we move further into the 2020s, America will find itself at a crossroads. The rate at which we innovate will continue to accelerate at an astonishing pace, and the opportunities for dishonest and dangerous people to harm Americans will also increase. Cryptocurrency offers a way to track every financial transaction made – a feat not possible with fiat money. If America wants to remain a dominant economic power and continue to innovate at an accelerating pace – at the same time reducing the risk posed to American families – the new Biden administration should move to embrace cryptocurrency at all levels, including from both within the Treasury and in the Federal Reserve.
Incoming Secretary of the Treasury Janet YellenThe Money: Treasury announces efforts to help people get stimulus payments Senate panel unanimously promotes Yellen’s nomination for Treasury | Judge sets ground rules for Trump tax release Trump’s impeachment trial to begin week of Feb. 8 Overnight Defense: Austin takes the helm at the Pentagon | COVID-19 briefing part of Day 1 agenda | Anger over images of National Guard soldiers in a MORE parking garage has revealed some doubts about cryptocurrency, especially as it could relate to crime and terrorism. Dr. Yellen is real and should be taken seriously. Fortunately, I know that Dr. Yellen is a smart and well-educated person, very capable and fully qualified for such a time as this. If there is anyone who could navigate these waters and see the potential that cryptocurrency can offer the United States Government, it would be Secretary Yellen.
I urge Secretary Yellen to examine closely the benefits that cryptocurrency can bring in reducing crime, preventing terrorism, eradicating counterfeit money, and creating a safer environment for small businesses in a post-pandemic world. Every effort the U.S. government takes to protect American families can be improved by working with innovators in the cryptocurrency industry to find dynamic solutions to new problems.
With first-hand knowledge of how to explore blockchain transactions and track wallets, experienced cryptocurrency industry professionals can demonstrate how to monitor payments and fight crime in real time.
We have started this industry from the beginning, now we want to collaborate with government to make the traditional and devolved financial industries seamlessly integrate.
We all benefit from regulators and innovators working together; let’s do that again.
Marshall Hayner, CEO of Metal, the first digital crypto banking platform formed in 2016, has 10 years of cryptocurrency, blockchain and related banking experience. Prior to Metal, he created the first integrated Bitcoin wallet on Facebook, QuickCoin, in 2013, and the following year he launched Stellar blockchain. He has advised several blockchain and cryptocurrency startups. Follow him on Twitter @MarshallHayner