European Central Bank President Calls for Regulating Bitcoin; Clearly Doesn’t Understand the Point of Cryptocurrency

 

Some things make you shake your head.

In a moment of irony, European Central Bank President Christine Lagarde called for global regulation of Bitcoin, which totally misses the point of why the cryptocurrency was invented in the first place. The developers of Bitcoin, and later the adopters, specifically want a monetary and asset class that is not controlled by state actors.

Lagarde says the digital currency has been used for money laundering activities in some instances, which is true. So have euros, U.S. dollars, and every other currency.

Lagarde said:

“(Bitcoin) is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity. There has to be regulation. This has to be applied and agreed upon … at a global level because if there is an escape that escape will be used.”

Again, she misunderstands how Bitcoin works.

Ownership is anonymous, although it is not hard to determine if a Bitcoin holder actively uses his digital wallet, but the transactions are available for the world to see in what is called the distributed ledger. If Lagarde wants to trace Bitcoin, all she needs to know is the public “key” associated with any transaction, and then she can see everywhere that “key” sent Bitcoin, something that’s not possible with traditional banking.

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