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In a recent interview with CNBC, the President’s advisor and coordinator of cybersecurity for the White House, Rob Joyce, confirmed that the government is closely watching the evolution of Bitcoin and other altcoins. However, he said that it will still be a while before US authorities can pass any regulatory framework. Still, according to Joyce, it's better to fully understand the benefits and risks of cryptocurrency before diving in head first.

“My opinion is that we are still in a phase of observation to understand both sides of the coin. So, no. I do not think that any regulation will happen anytime soon.”

 

A Scary Virtual Currency

Unlike fiat currency, Bitcoin is a decentralized cryptocurrency, which means that it is not supported by any government or central authority. An aspect that has brought on much criticism from those who do not believe that it has any intrinsic value.

The extreme spikes throughout 2017 only go to reaffirm the allegations of speculation surrounding Bitcoin.

Bitcoin has also been accused of making it easier for those involved in illegal activities to hide their money from the government. "We are worried. There are, of course, benefits to the Bitcoin concept" said Joyce. "But at the same time, if you analyze how Bitcoin works when used in a criminal act, you will quickly understand that it’s impossible to go back and recover the stolen money."

KYC (Know Your Client)

Joyce’s statements echo the same sentiment as that of US Secretary of Treasury, Steven Mnuchin. At the Davos conference last January, Mnuchin declared that he believes that cryptocurrency needs to be government much in the same way that banks and other institutions are governed: via KYC or Knowing Your Client.

"It's something we watch very carefully, and we will continue to observe," said Mnuchin. "The most important thing is to ensure that criminals are not able to use cryptocurrencies for illegal activities. So, we want to make sure that what happens on the dark web does not get involved in Bitcoin. These days, this has become a major concern.”

The Real Knowledge of a Politician

According to the US Treasury Department, at present, there is only a small volume of illegal activities that make use of cryptocurrency and the US dollars is the currency that is most often used for criminal activity.

Still, faced with this problem of illegal activity, users of cryptocurrencies are calling for legislation that will not clog up Blockchain’s system with unnecessary laws. For example, Chairman of the Commodity Futures Trading Commission (CFTC), J. Christopher Giancarlo asked the Senate to “carefully adopt” specific regulations to the problems that are present on the market.

In other countries, leaders and politicians are divided on the future of Bitcoin. The International Monetary Fund (IMF) has said that they wish to see cryptocurrency regulated. Whereas, threats from the South Korean government to regulate the industry have caused the markets to take a plunge.

In France and Germany, their governments are working on their own legal framework after the EU called for more control on a currency that is being used for drug trafficking, money laundering, and terrorism.

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