The incoming US administration looks determined to vilify Bitcoin and cryptocurrencies in general as tools whose main purpose is to help criminals and terrorists.
Those who advocate for greater adoption of digital, decentralized money say that it helps people become independent from the power and whims of central banks. Now Janet Yellen, who will serve as Secretary for Treasury in the Biden administration, says she has “a particular concern” regarding this type of digital money.
Addressing a Senate Finance Committee on Tuesday, Yellen said she “thought” that when it comes to transactions, many cryptocurrencies are used “mainly for illicit financing.”
The point of all this seems to be to justify and move forward with efforts to regulate cryptocurrencies – as Yellen added that the authorities need to look at how to effectively suppress their use in order to ensure they are not available to money launderers and other criminals.
However, those in the cryptocurrency community say that claims like these – namely, that Bitcoin and others are “mainly” used for illegal purposes – are simply not supported by available data, and call the narrative that Yellen is pushing false.
To support this, the latest report published by Chainalysis, a blockchain analysis company, shows that in 2019, only 2.1 percent (amounting to $21.4 billion) of the entirety of cryptocurrency transaction volume was criminal in nature. The following year this number was even lower, according to the same source: 0.34 percent, worth $10 billion.
Compared to the overall global money laundering done using fiat money, this figure is smaller and falling, because the UN data says that kind represents between 2 and 5 percent of global GDP, or 1.6 to 4 trillion dollars.
Rand Corporation’s research from last year adds more arguments to this, as a study the non-profit produced noted that 99 percent of cryptocurrency transactions go through centralized exchanges which can already be regulated like banks.
So why is Yellen making her anti-crypto argument?