Goldman Sachs chairman Lloyd Blankfein said regulators should “breathe a sigh of relief” in response to Bitcoin’s recent success, describing cryptocurrencies that undermine regulators’ ability to control the financial system.
Blankfein, who appeared on CNBC’s Squawk Box on January 25, said the borrowed nature of Bitcoin makes it ideal for illegal financing, saying, “You do not know if you are paying North Koreans, Al Qaeda or the Revolutionary Guards.”
While authorities often use blockchain transparency to track terrorist organizations’ use of cryptocurrencies, Blankfein questioned how regulators could allow cryptocurrency pools to thrive in their current form.
He said: “If I were a regulator, I would be a little excited about [Bitcoin] success at the moment, and would arm myself to deal with it.”
Blankfein argues that in order to align Bitcoin with current economic and regulatory entities, many of the fundamental freedoms that BTC provides must be exploited. However, he asked if Bitcoin’s claims would continue to go strong without the pseudonymized privacy features:
It may work, but it undermines the freedom, liberty and opacity that people love in the first place. So it’s a mystery that Bitcoin will find a way out. ”
Blankfein also criticized Bitcoin as a store of value, highlighting the price volatility and technological prowess needed to store BTC alone.
It is a store with value that can move 10% in one day. “If you lose the code or lose a piece of paper – lost forever, or if someone takes it from you – you know,” he said. …
In August, the US Department of Justice announced the seizure of millions of dollars in cryptocurrencies from more than 300 wallets linked to Al Qaeda and ISIS.
In the announcement, Don Forte, head of the IRS’s criminal investigation unit, or IRS-CI, emphasized that the agency was able to trace the cryptocurrency to the source so that it could disrupt groups’ financial networks.