'EU crackdown on bitcoin is attempt to protect banks'
The European Union agreed on Friday to stricter regulations to prevent money laundering and the financing of terrorism using bitcoin exchange platforms.
“Today’s agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing,” Europe’s Justice Commissioner Vera Jourova said.
RT discussed the issue with Annie Machon, a former MI5 intelligence officer, and Paul Rosenberg, a founder of Cryptohippie and CEO of Cryptohippie USA.
RT: The EU regulations on cryptocurrency come into effect in 18 months, but how necessary are these strict measures in the current cryptocurrency climate?
Annie Machon: I think we have a situation where any new form of technology on the internet, we’ve seen this for the last 30 years, that challenges the business models of established businesses is going to be cracked down on by governments, by international organizations to try and protect the old business models.
I think that is what we are seeing here; we saw it with the huge legal fight that went on with the release of PGP encryption (Pretty Good Privacy) on the internet 25-30 years ago. And we have seen it again in the attack on the old business model of the old media where piracy became the new threat and they tried to use laws to stamp that out. I think that is inevitable, if we have something that decentralizes the money supply and threatens the business model of the banks, of course, there’s going to be pushback against it.
RT: Under the new EU legislation on tightening regulation, are governments trying to discredit users of cryptocurrencies by labeling them all as ‘money launderers’?
AM: It is inevitable. Any crackdown on our rights of privacy on the internet always has an excuse that it is trying to stop money laundering or trying to stop terrorism or pedophiles or whatever. I think, probably the vast majority of users of bitcoin are doing it legitimately, they just have a legitimate concern to uphold their right to privacy as well. Yes, sure, criminals are going to use this, but criminals already use banks. So many banks have been caught out money laundering on vast scales and have received vast fines for laundering gray and black money from particularly the drug trade. Perhaps, we should say that the EU should close down our banks, too.
‘Cryptocurrencies are tremendous benefit to world economy & the poor’
The coercive institutions of the past are being threatened by the voluntary institutions of the future. However, the rise of cryptocurrency is a magnificent benefit to the world’s poor who have no access to any sort of banking system, says Paul Rosenberg, CEO of Cryptohippie USA.
RT: What impact will the new EU legislation to tighten regulation have on the cryptocurrency market?
Paul Rosenberg: It is a good question what this regulation is going to do. I would say, in general, not terribly much. What they are doing is they are attacking the companies that service the bitcoin market, the people who make wallets, the people who run exchanges. There is no reason that the people in the EU have to use those companies. They can go to others and indeed, those companies may close down and just move somewhere else, where they are not going to have these type of restrictions placed upon them. These restrictions are unnatural to cryptocurrencies. It is a different type of system. It is an open question as to what will happen, but I suspect that a lot of people will just not do business through the EU.
RT: How much of a threat is the rise of cryptocurrency to the global economy and world banks?
PR: I think it is a tremendous benefit to the world economy, not a threat at all to the real economy, we are talking about: carpenters, electricians, nurses, truck drivers, and people who run data services – it is a tremendous benefit to people who do real things. It is only a threat to the institutions that are rooted in the past. What this really boils down to at the end of the line is the coercive institutions of the past being threatened by the voluntary institutions of the future. So, those institutions are worried about this but for the average person who works, this is a tremendous benefit, and it is a magnificent benefit to a billion of the world’s poor who have no access to any sort of banking system...