November 19, 2013
En route from Hong Kong to the United States
Senator Tom Carper (Delaware) is confused about Bitcoin.
As Chairman of the Senate Committee on Homeland Security and Governmental Affairs, this is how Carper framed his opening remarks yesterday at a hearing about digital currencies– with complete, incoherent confusion.
Carper’s hearing went on for several hours as one witness after another testified about the potential evils of digital currencies. They hailed from agencies and organizations like:
- The Homeland Security committee
- Criminal Division of the US Attorney General’s Office
- US Secret Service Criminal Investigative Division
- The Financial Crimes Enforcement Network
- The International Centre for Missing & Exploited Children
Based on the way they stacked the witness list, the message they’re sending is clear: digital currencies like Bitoin equate to crime, terrorism, and child exploitation.
But the height of absurdity in yesterday’s hearing probably came during the testimony from the Financial Crimes Enforcement Network (FinCEN), in which the agency’s chief cited the BENEFITS of digital currencies, including:
- simple, easy to navigate
- lower fees than the conventional financial system
- globally accessible
- can be used as both a store of value and medium of exchange
Yet in listing all of these benefits, FinCEN’s chief was actually trying to make a case AGAINST Bitcoin! In her mind, only criminal terrorists want low-fee, secure, globally accessible money.
All of these politicians and bureaucrats can’t wait to get their arms around digital currency to regulate the hell out of it. They don’t understand it… therefore they think it’s dangerous.
Even the World Bank president (a US government-appointed stooge) weighed in on digital currencies. It’s obvious they’re all afraid.
And their entire argument begins with the deeply flawed premise that financial privacy is somehow wrong, immoral, and nefarious.
There’s no sense trying to convince them otherwise. Government’s mission is to obstruct… particularly a government in decline.
So we can expect more hearings, more regulation, more disclosures. At least, in the Land of the Free.
Over here on the other side of the world, though, they’re not afraid of Bitcoin.
Places like Hong Kong and Singapore understand that they have a role to play as preeminent international financial centers in becoming financial hubs for digital currencies.
If the US wants to shoot itself in the foot (again) and shut itself out of the market, so be it. But Asia is embracing its potential role in the marketplace, complete with all the risks and rewards.
It wasn’t but a few weeks ago that a Hong Kong-based bitcoin exchange ran off with a few million dollars of customer money. But that hasn’t cooled demand in the region… nor has it sparked a wave of debilitating regulations to clamp down on digital currencies.
What this ultimately means is that all the new businesses and intellectual capital associated with digital currencies will flock to Asia… just in the same way that all the cutting edge precious metals firms are now basing themselves in Singapore.
The US government is sharpening its steak knives in anticipation of a great digital currency roast. But they’ll find out very soon that Bitcoin has left the building… and moved on to greener, safer pastures in Asia.
This is good news, especially for second generation digital currencies and related firms like litecoin, ripple, and ven.