The Chamber of Digital Commerce (CDC), based in Washington, D.C., has urged the Group of Seven (G7) nations not to enact virtual currency regulations that will stifle innovation in seeking to prevent future terror attacks like the one in Paris last week. The CDC is concerned that the G7 countries want to restrict virtual currencies because they suspect Islamic State terrorists used and continue to use bitcoin.
Stifling digital currency innovation would be counterproductive for law enforcement, according to the CDC. It claims the block chain offers law enforcement an important tool for investigating criminal activity.
In a reaction to the Paris attacks, European Union (EU) countries have planned an emergency meeting today in Brussels, Belgium, to discuss ways to strengthen controls over electronic and anonymous payment methods. A draft obtained by Reuters said EU ministers will urge EU’s executive arm – the European Commission – to enforce new measures. The ministers are also expected to discuss the regulation of fintech firms.
The CDC , which advocates for digital currency, issued a statement noting that virtual currencies are already highly-regulated, especially in G7 countries. While these countries regulate the currencies, the majority of bitcoin transactions take place outside of these nations. Hence, increasing regulation within G7 nations will only serve to build pressure on companies working to comply with existing laws like the Bank Secrecy Act. Adding such pressure could serve to drive more bitcoin to unregulated markets.
Bitcoin is potentially one of the greatest tools law enforcement has in investigations, the CDC maintains. Increased education, not regulation, is what is needed.
A common misconception about bitcoin is that it is anonymous, when in fact, it is pseudonymous, said Perianne Boring, founder and president of the CDC. Boring acknowledged that it might be easy to conceal personal information on the block chain, but bitcoin is traceable. Boring said bitcoin is one of the most transparent currencies available.
“This gives law enforcement a greater chance at following, tracing, and ultimately apprehending criminals that use bitcoin, as opposed to cash, where there is no digital trail,” Boring said.
As a co-founder of the Blockchain Alliance, a public-private forum for U.S. law enforcement and the digital asset community, the CDC works to educate law enforcement about the benefits of bitcoin and block chain technology. The alliance works to help battle criminal use of the block chain.
According to the German magazine Der Spiegel, G7 nations suspect Islamic State of using digital currencies to transfer funds secretively.
Today’s proposed meeting is scheduled before a similarly focusing G7 meeting to be held on Monday in Turkey, according to CCN.com.