Several US Congress Members Cooperate to Create AML Compliant “Bitcoin”
The Daily Caller, a Washington-based news publication, has revealed that three members of Congress are attempting to protect digital currencies like bitcoin from government interference.
Sources from other US-based news publications, including the Hill, also stated that several members of Congress are actively investigating bitcoin, as well as the possibility of creating a digital currency based on bitcoin that’s fully compliant with the American Know Your Customer (KYC) and Anti-Money Laundering (AML) policies.
A Daily Caller source wrote:
“The centrepiece of the plan is to mainstream digital currency so it can be treated just like the American dollar. First, there is a new entity that is considering issuing a brand new digital currency that is compliant with anti-money laundering laws unlike any other in circulation.”
Within eight years of its launch, bitcoin has evolved into a $78 billion financial network. One that is developed, maintained and operated by a decentralised community of developers, miners and node operators. Bitcoin’s decentralised nature has allowed it to become the world’s premier store of value and settlement network.
More importantly, its unique monetary policy and fixed supply has provided bitcoin scarcity and rarity, two important characteristics for a store of value. As a result, the demand for bitcoin has increased at an exponential rate, recording a staggering $2 billion daily trading volume on a regular basis.
The development and deployment of a state-owned digital currency defeats the basic purpose and fundamentals of decentralised digital currencies and blockchain projects like bitcoin and Ethereum. Bitcoin was created to serve as an alternative financial network to existing banking systems and centralised financial platforms. The development of a blockchain-based digital currency that is fully compliant to every AML and KYC policy is a flawed vision in many aspects.
Essentially, the members of Congress that are currently collaborating on the state-backed “bitcoin” are proposing a cryptocurrency built on top of a permissioned ledger or a centralised blockchain protocol. However, the deployment of a centralised cryptocurrency renders the utilisation of blockchain technology useless, as a blockchain network can only be efficient within a decentralised ecosystem in terms of security and immutability.
Bitcoin, Ethereum and other leading blockchain projects and cryptocurrencies utilise blockchain as a database technology. Although the term “blockchain” has been associated with bitcoin as its underlying technology, bitcoin and security expert Andreas Antonopoulos previously explained that the blockchain is one of many technologies that supplement the bitcoin network and that it alone does not provide a distinct function. During a presentation entitled “Blockchain vs. Bullshit – Thoughts on the Future of Money” Antonopoulos provided at the Blockchain Africa Conference in South Africa, he stated:
“Blockchain is the technology behind bitcoin. Which is incorrect. Blockchain is one of the four foundational technologies behind bitcoin and it can’t stand alone. But that hasn’t stopped people from trying to sell it. Blockchain is bitcoin with a haircut and a suit you parade in front of your board. It is the ability to deliver a sanitised, clean, comfortable version of blockchain of bitcoin to people who are too terrified of actually disruptive technology.”
Some countries, such as Estonia and China, have also expressed their optimism toward a state-backed cryptocurrency. But, government agencies of both are looking to launch their unique crypto-tokens on top of the Ethereum protocol. Earlier this year, Andrew Keys, head of global business development at Consensus Systems (ConsenSys) revealed that the Royal Chinese Mint, the subordinate unit of China Banknote Printing and Minting, is testing ERC 20 token standard-backed crypto-tokens to develop a national digital currency for Chinese citizens.
However, several members of Congress are attempting to pass a bill which protects digital currencies compliant with the federal government’s AML policies.
“The law needs to be changed to protect digital currencies from federal government harassment to make sure that a complaint currency can be backed by value, the currency cannot be treated like a security or investment, and that transfers are protected against taxation. The bottom line is that Congress needs to remove all the obstacles to a vibrant digital currency that has voluntarily taken the initiative to keep the bad guys from using it,” the source added.