As a former Wall Street banker myself, news of the banking industry’s collective influence on the greater society at large always strikes a nerve with me. Banking, in and of itself, is generally a very good thing for societies. People cannot buy major purchases like homes and cars without loans and lawyers involved. Your membership buys you a certain amount of access to credit, equity, and financial assets that the common man normally wouldn’t have. Banking is legalized, slightly regulated loansharking.
The problem usually comes within the fractional reserve banking aspect and the banking industry’s ability to make and control the amount of money in a society. This level of control has proven problematic as banks have run amuck in Western society and have gone unchecked by the government. In fact, banks usually come out ahead when they step well over the line of ethical, economic behavior. “Bail-outs,” “Bail-Ins,” and derivatives trading, that has run into the quadrillions, are but a few examples of a financial system run amuck, and in serious need of external leadership and true governance.
George Osborne, the Chancellor of the Exchequer in Britain and Second Lord of the Treasury since 2010, announced plans last year to explore how cryptocurrencies such as Bitcoin can play a role in the UK financial system. The UK Treasury worked on producing an economic report on digital currencies to detail their potential long-term risks and benefits. On the strength of this missive, Osborne said he plans to make the United Kingdom the “global center of financial innovation”.
In a recent document sent to the Treasury , the British Bankers Association (BBA) warned the chancellor with the ability of Bitcoin to be used pseudonymously online worldwide. Also, with its unique, innate design to work entirely as a peer-to-peer currency worldwide, Bitcoin could provide opportunities for criminals and/or terrorists.
Speaking to the Sunday Telegraph, the BBA’s chief executive Anthony Browne said:
“The reality is that if terrorists and criminals harness these unregulated currencies they will be far harder for the law enforcement and intelligence agencies to hunt down. Banks need to be able to demonstrate that transactions are legitimate and that they are not supporting criminal or terrorist activity. At present … [banks] are unclear of their responsibilities with regards to servicing those working with, paying or receiving digital currencies”.
The banking argument is the same argument levied against the Internet twenty years ago. The Internet, the original decentralized global network, was also considered a new “den of thieves” that was built for crime and deception, so said the establishment. “Terrorism” is the new establishment hot button to hide behind. Forgetting the salient point that many of today’s so-called terrorists have more ties to governments than Bitcoin, the Internet, or any other technological advancement.
And why would the British Bankers Association or ANY central banking cabal, endorse, promote, or approve of any currency or monetary system that they don’t control or create themselves? That is not in their best interests, and I can tell you from personal experience, the banking industry could give a damn about the greater good, or any societal advancement this may generate. Bitcoin can replace the current, highly corruptible banking system long-term, and don’t think that’s not part of this argument against cryptocurrencies.
This ties into the bigger issue of the Police State being established in the West, the U.S., and the U.K. in particular. Anything that is beyond the Establishment’s control: Bitcoin, “Net Neutrality”, the right to bear arms, homeschooling, etc. have been tied to “terrorism” in recent years. Forget all the positive befits. Makeup one potential, theoretical negative tied to “terrorism”, and you have a threat to Planet Earth that only The State can quell. Such freedom-bearing ideas have also been used as a catalyst for more State control over the free will of citizens. Anything without a heaping helping of state control is ripe for control by “The Boogie Man”, conveniently labeled “terrorists”. And if there is no “Boogie Man”, give The State a minute. They’ll come up with something.
The British Banking Association is very much correct in the idea that they have little understanding of Bitcoin transactions, or how they are supposed to control them if integrated into their system. And I also agree that they should not be forced to integrate such a revolutionary and foreign currency into their aging and corrupt financial “Ponzi scheme”. It’s like forcing loan sharks to read Socrates or study Algebra. It’s an oil-and-water concept. One is based on sound economic, monetary principles, and government by mathematics, and the other is our current banking system. Overall, the two should be kept separate, and if Bitcoin needs banking institutions, hopefully, the Bitcoin community can build them from the ground-up. That way, they can be much more responsible and accountable than the financial fiefdoms of today.
I can also see why Osborne is ready to take the Bitcoin ball and run with it domestically as his economic torch. He sees “the future of money” in Bitcoin and wants to build it into the UK’s economic future, a wise move in the long-term. Britain has made the fatal error of missing The Next Big Thing with the automobile back in the late 19th century. The government at times treated cars in Britain like moving time bombs. Look up “The Red Flag Laws” of the 1860s. The made the world’s next great invention an enemy to the British people. They over-regulated it to such a degree that automakers migrated from the UK to Germany and the US, and the rest is history. Osborne looks like he can recognize an economic diamond in the rough, and doesn’t want his country to get left behind without learning from history, and thereby repeating the mistakes of the past.
My advice to Mr. Osborne is to indeed embrace Bitcoin. Just don’t try to tie it to an old radiator like the banking industry. The radiator will just hiss at Bitcoin, and it will get burned. Keep oil and water separate, and look for ways to foster new business investment and a committee of agreed-upon standards to use in the UK’s domestic digital currency realm going forward.
Banking has had its chance. Let Bitcoin have the same free swing at the market “the banksters” did for the last couple of centuries. Let digital freedom ring. It worked for The Internet.