"Crypto as 'Next Swiss Bank Account'"

DawgStreet's picture
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One of the biggest appeals of crypto currencies is that they are 'anonymous' and that they are difficult to trace. Naturally, that is why criminals used Bitcoin to hide their tracks. The blockchain technology prevents people from being able to tell who actually owns what because "strings and letters" are the only thing people see when they look at buyers and sellers. But according to Bloomberg, nowadays tracing is no longer a problem:

law enforcement has developed technology to track and seize illicit Bitcoins.

Once Bitcoin is purchased, there's software that can detect patterns and trace the owner.

With strong regulations on offshore financial institutions, crypto has been a safe-haven for many due to limited enforcement of crypto regulations outside of the US. One of the biggest innovations that beats Bitcoin for this purpose is the introduction of "privacy coins":

The use of virtual money to store assets offshore is evolving rapidly, with the introduction of so-called privacy coins, such as ZCash and Monero, which use methods like encryption to make them untraceable. About $10 trillion is held offshore worldwide, according to Grayscale Investments, a New York-based firm that's offering a ZCash Trust to investors. ZCash could capture as much as 10 percent of that by 2025, said Grayscale's Matthew Beck.

So according to world leaders who fear that cryptocurrencies might become the "next Swiss Bank Account", this prompts the need for "a regulated structure that won't kill the industry".

What do you think? Have "privacy coins" prompted a real need for stricter regulation on cryptocurrencies or do you think regulation would do more bad than good as it hinders the growth of the industry?

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Jan 29, 2018