The cryptocurrency industry has been in a lot of trouble in recent months. His two cryptocurrency exchanges, the largest in the industry, coin base and binancehas been charged with a serious offense of violating regulations.Young cryptocurrency moguls Justin Sun and Dokwon were charged with fraud. And of course, his next two his three-letter acronyms have become synonymous with the worst of cryptocurrency corruption. FTX and SBF. The U.S. government is also studying the potential threat that cryptocurrencies pose to national security. The Treasury Department announced this month how cybercriminals, ransomware hackers, and rogue states like North Korea will use a decentralized financial marketplace known as DeFi to move funds to finance illegal activities and evade sanctions. released a report detailing how it is being used. The Department of Defense’s Defense Advanced Research Projects Agency currently one year study About cryptocurrencies and national security.
But while U.S. officials are learning how to deal with the potential dangers of cryptocurrencies, other countries remain bullish on cryptocurrencies. El Salvador Many Salvadorans are still experimenting with bitcoin as legal tender. I do not use it. Caribbean island Dominica teamed up with Justin Sun todigital citizenshipThe program is primarily for Chinese cryptocurrency investors.Switzerland Continues to Attract Crypto Enthusiasts crypto valleyJapan, Singapore and South Korea lead Asian countries Regulations supporting cryptocurrencies, and South Africa Declared crypto assets as financial instruments. Naturally, countries should seek to streamline financial transactions, create transparency and immutable payment ledgers, reduce transaction costs, and improve access for the unbanked and unbanked. , is on its way to becoming a pioneer in cryptocurrencies. But to be the first in cryptocurrency, you must not sacrifice doing it right.
Over-reliance on cryptocurrencies poses very real dangers to a country’s economy, energy and national security. If the country’s central bank were to overhold his one cryptocurrency and the market suddenly crashed, the country’s coffers and citizens’ savings could be wiped out. Bitcoin uses “Proof-of-Work” (PoW) mining to validate blockchain transactions. huge amount of electricity— sometimes as much as entire cities, millions of households– potentially causing pollution and using up valuable energy resources that could have been used to bring light and broadband to rural populations. And, as mentioned earlier, transnational criminal organizations and rogue states are already using cryptocurrencies to launder money and evade sanctions.
Additionally, some of the so-called cryptocurrency “consultants” who help countries roll out programs may be scammers. Justin Sun, for example, persuaded the Grenada government to appoint him as undersecretary. ambassador of the country He submitted to the World Trade Organization even though he already had a permit. unscrupulous business background Many years. The Bahamas Prime Minister once hailed Sam Bankman-Fried and FTX with open arms and generous regulatory leniency. After some time, Bankman-Fried became an international pariah, and he reportedly even paid a US$40 million bribe. Chinese officials.
One country that seems to get cryptocurrencies right is Estonia.One of the first countries in Europe to receive Fintech Since 2008, Estonia initially made it easy for people around the world to open thousands of cryptocurrency businesses without having a physical presence in the country. However, Estonia’s lax cryptocurrency regulations and minimal oversight weakened its ability to police cryptocurrencies. financial crime, money laundering and terrorist financing. Estonian authorities prioritized quality over quantity and adopted five EU guidelines.th Anti-Money Laundering Directive and Combating Terrorist Financing law, which deterred bad actors while encouraging public-private partnerships in cryptocurrencies.Currently, 160 cryptocurrency businesses are ongoing operating in Estonia. Not all businesses that have disappeared are suspicious, and some have been victims of “incidents.”crypto winterHowever, the rest of the cryptocurrency companies show that the government has successfully implemented cryptocurrency quality control.
Now is the time for countries to adopt common sense safeguards similar to Estonia as their cryptocurrency markets continue to develop. First, national leaders should consider pausing nationwide crypto efforts before the government puts in place appropriate regulations. In this regard, various AI and industry experts have written letters proposing to suspend ChatGPT and other generative AIs so that companies and governments can take appropriate protective measures. . Cryptocurrency experts should consider similar measures.
Second, countries involved in cryptocurrencies should work together to set international standards for the industry and share best regulatory practices.recent ministry of finance report This is a good start, requiring cryptocurrency companies to follow the same anti-money laundering rules as banks and other financial institutions, and increasing government oversight. One of the standards that needs to be developed is international standardization for the classification of cryptocurrencies. Both the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are considering whether certain cryptocurrencies should be considered securities or commodities. howie test. Regardless of what conclusions are reached, both regulators should meet regularly with international regulators to develop their thinking on this issue. International organizations such as the WTO and World Bank may also facilitate such meetings.
Third, countries should encourage domestic cryptocurrency enthusiasts to trade and invest in cryptocurrencies that use “”.Proof of Stake” (PoS) consensus protocol. PoW miners use a lot of power to validate transactions on the Bitcoin blockchain, but PoS requires only a few people to validate transaction blocks, saving a lot of money. more energy in the process.
Fourth, countries should include national security and law enforcement experts, as well as cryptocurrency investigators to help build crypto programs. Blockchain analytics firms like Chainalies, Elliptic and CipherTrace are helping US law enforcement shut down Founded a child pornography organization, blocked funding for North Korea and terrorists, and recovered $3.6 billion from a New York couple accused of money laundering. These companies can also assist foreign law enforcement in investigating cryptocurrency crime.
Finally, the government should conduct more thorough background checks on so-called cryptocurrency consultants who offer to help launch national cryptocurrency initiatives. They should be especially wary of young overnight millionaires who call themselves “crypto experts,” “crypto diplomats,” “sirs,” etc. . The Pandora’s box of cryptocurrencies cannot go back to the proverbial box. However, countries can certainly pause now, rethink their strategies and efforts, and consider all aspects of cryptocurrencies – good, bad, and ugly.
Mike Asensio He is Program Director at Florida International University’s Jack D. Gordon Institute for Public Policy, with a focus on cybersecurity and cyber infrastructure resilience. Cyber Overseeing his Florida-funded professional education programs statewide, his dedication to emerging technologies is positively shaping the future of cybersecurity public policy.
Leland Lazarus He is Deputy Director for National Security at the Jack Gordon Institute of Public Policy at Florida International University and a Non-Resident Fellow of the Atlantic Council’s Global China Hub. He previously served as Special Assistant and Speechwriter to Commander U.S. Southern Command, as well as a U.S. Department of State diplomat in China and the Caribbean.