Recent research published by Messari revealed that bitcoin (BTC) is not at all the financial threat that some critics claim. Messari said that they performed the research in response to recent remarks by U.S. Treasury Secretary Steven Mnuchin.
Data from Chainalysis and the United Nations Office on Drugs and Crime revealed that traditional fiat money is used 800 times more than bitcoin to launder money on the darknet. The results don’t take into account estimates of money laundering through conventional markets.
Mnuchin vs the UN: Who is right about Bitcoin?
The UN statistics contrast sharply with the statements of Steven Mnuchin, who overestimated the problem to the point of describing cryptocurrencies as a “national security issue.”
“Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking. Many players have attempted to use cryptocurrencies to fund their malignant behavior. This is indeed a national security issue.”
If cryptocurrencies are really a problem, it is not for the reasons given by Mnuchin. The results of Messari’s research reaffirm what Europol had already concluded in a report titled Why Is Cash Still King?
In this report, Europol explains that practically all criminals use traditional money in their operations and that bitcoin and cryptocurrencies, in general, are not very popular among criminals:
“Although not all use of cash is criminal, all criminals use cash at some stage in the money laundering process …
While the world is looking with concern at the possible misuse of virtual currencies by criminals, this report may seem somewhat unusual in that it is not highlighting a new phenomenon or an emerging risk…money laundering schemes detected by law enforcement are still largely characterized by traditional techniques, in particular, the use of cash.”
‘National Security Issue’
The report also reveals how bitcoin is considered more stable than fiat money. In the last decade, the Fed increased currency supply by 13,664% more than BTC did.
Perhaps this is a more objective reason to explain Mnuchin’s concerns. The impossibility of artificially increasing reserves is key to maintaining economic policies in the traditional financial system.
In a recent statement, Mnuchin warned that the Trump administration would pursue “very, very strong” enforcement of existing regulations to prevent unlawful use of cryptocurrencies. Meanwhile, policies to prevent the 800 times greater use of traditional dollars in criminal activities have not yet been disclosed.
Last modified: March 4, 2021 2:38 PM