The US Government Sends Mixed Signals on Digital Currency Privacy

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 13 February 2020

⏱️ 21 minutes

🔗️ Recording | iTunes | RSS

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Summary

To look at the US Government, it is the best of times and the worst of times for personal financial privacy. On the one hand, in comments before the Senate Financial Services Committee, Treasury Secretary Steven Mnuchin says that FINCEN is planning more strict regulations around anti-money laundering and crypto. At the same time, the CEO of DropBit was arrested on money laundering charges around a bitcoin mixing service he ran between 2014 and 2017. In this new enforcement regime, one of the government’s major partners is Chainalysis, who have seen more than $10m in Federal agency contracts since 2015. Yet privacy advocates are also surprisingly enthused by comments from Fed chair Jerome Powell, who suggested in testimony to Congress that any potential US digital dollar would need to be privacy preserving.

Transcript

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0:00.0	Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond, with your host, NLW.
0:15.0	The Breakdown is distributed by CoinDesk.
0:20.0	Welcome back to The Breakdown.
0:22.5	It is Thursday, February 13th, and today we are going to be talking about one of the most significant
0:28.1	and contentious issues in cryptocurrency, privacy.
0:33.1	Privacy is at the heart of debates around cryptocurrencies for a couple reasons. On the one hand, there is a
0:39.6	question of law enforcement. The chief concern over the 10-year history of Bitcoin and other
0:45.7	cryptos that regulators have and that enforcement agencies have is that cryptocurrencies can be used
0:51.8	to move around financial controls like anti-money laundering
0:55.3	protections that are used to fight terrorism, drug trafficking, and so much more.
1:01.3	Now, on the other hand, users of cryptocurrencies are worried about things like encroaching
1:07.5	government surveillance and the ability for governments to have better near-perfect
1:13.2	visibility into their citizens' financial behavior. This brings with it a huge number of
1:19.3	concerns about abuses, and so cryptocurrencies, which are potentially harder to trace,
1:25.1	are incredibly important, especially in the context of a society and a world
1:29.7	that is moving increasingly away from cash. Cash today remains the most private way of
1:35.9	transacting. However, governments around the world are pushing to move to a cashless world. Big corporates
1:42.4	like Visa and MasterCard are obviously invested heavily
1:45.0	in a world where there is no cash. And as the conversation about government digital currencies
1:50.2	heats up, so too is the conversation about surveillance becoming even more important.
1:56.0	So on the one hand, you have concerns from regulators about privacy as it potentially flouts and gets around
2:02.5	important tools of law enforcement. And on the other, you have concerns from privacy advocates
	...

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