Central Banks Looming Assault To Manipulate Bitcoin

What is their ultimate game plan?

“Bitcoin is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity,” Christine Lagarde said in January 2021 in an interview at the Reuters Next conference.

In 2012, seven percent of bitcoin transactions did happen for criminal deals. Currently, the percentage dropped to less than one percent.

The utility of bitcoin has grown well beyond its use for criminal purposes.

In June 2019, the G20 planed to remove anonymity from the crypto space. They formed the Financial Action Task Force’s (FATF). Crypto exchanges would keep detailed information of all senders and receivers. In the name of cutting down on criminal activities.

We can use any tool for good or bad. And criminal control activity is essential for a healthy democracy.

Yet, if you compare one percent of bitcoin to what happens in the global financial system, you’d find Christine Lagarde’s comments at least intriguing.

2–5% of global GDP ($800 billion — $2 trillion) do money laundering each year using the dollar.

Some commentators argue that financial institutions are not doing enough to stop money laundering and are instead filing SARs to protect themselves from criminal prosecution while profiting from processing suspicious transactions.- jdsupra.com

Deutch Bank and JPMorgan Chase are some of the top banks flagged in fraud. A cache of leaked documents show years of transactions handled by the world’s largest banks linked to money laundering, corruption, and fraud.

2.7 trillion dollars in money laundering is a bunch of money. And these banks are linked to these terrible accusations. But no, that’s not the issue. Let’s get the attention to bitcoin, which has a market cap of a couple of billion dollars.

On 20th December 2016, BBC News reported,

A French court has found International Monetary Fund chief Christine Lagarde guilty of negligence but did not hand down any punishment.

As French finance minister in 2008, she approved an award of €404m ($429m; £340m) to businessman Bernard Tapie for the disputed sale of a firm.

I guess everyone has their hands dirty, doesn’t it, mademoiselle Lagarde?

That Government Is Best Which Governs Least

The governments can’t stop bitcoin, but they can put you in prison or fine you if you own it.

It all leads to capital control definition,

Capital control represents any measure taken by a government, central bank, or other regulatory body to limit foreign capital flow in and out of the domestic economy. These controls include taxes, tariffs, legislation, volume restrictions, and market-based forces. Capital controls can affect many asset classes such as equities, bonds, and foreign exchange trades.- Investopedia

This concept is recent in history because, in the last century, there were few international transactions. So there was no need for governments to control capital transactions.

After the First Great War, many countries found themselves in bankruptcy. Or had to print large amounts of money, devaluing their currencies.

In many cases, wealthy people tried to get their fortunes out of the country. Those same countries prevented that from happening. They created legislation and taxes for those who wanted to get their money out.

In 1944, after the Second Great War, with the Bretton Wood agreement, the capital was allowed to be used for international trade. Only for goods and services. So, you still couldn’t take your wealth and put it in another country.

Yet, in 1971, Nixon ends the convertibility of US dollars to gold, which brought an end to Bretton Wood’s agreement.

Capital control was always the ultimate tool from governments and central banks to dominate the system’s money flow.

That’s why ECB and IMF are starting to go public about Bitcoin and other cryptocurrencies — dominating capital control.

What the Global Regulators Are Saying

When we talk about regulators, all eyes go to the US Federal Reserve. They are the ones who dictate the rules worldwide. Since more than 70% of global transactions are made in dollars.

Brian P. Brooks became Acting Comptroller of the Currency until January 14, 2021. As Acting Comptroller of the Currency, Mr. Brooks was the administrator of the federal banking system. And the chief officer of the Office of the Comptroller of the Currency (OCC).

The OCC supervises nearly 1,200 national banks, federal savings associations, federal branches, and foreign bank agencies that conduct approximately 70% of all banking business in the United States. The OCC’s mission is to ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations.- occ.treas.gov

In a recent interview at CNBC, Brooks declared,

“We’re very focused on getting this right. We are very focused on not killing this, and it is equally important that we develop the networks behind Bitcoin and other cryptos as it is we prevent money laundering and terrorism financing.”

A few weeks later, the OCC announced that federally chartered banks and thrifts may participate in independent node verification networks. And use stablecoins for payment activities.

This was seen as essential news in the crypto world.

In many cases, the financial system has the most powerful lobbyists. And they are frequently accused of writing the bills themselves. Cryptocurrencies will be the new reality in the American financial system. Sooner than we think.

Final Thoughts

Some have predicted that the Great Reset is close.

Others see it as a unique opportunity for all central banks ‘to clean all the mess.’

Meanwhile, stablecoins are coming. Bitcoin gets serious as a hard asset. With companies starting to pill up BTCs as a refugee asset for their portfolio.

And a consequential technology disruption breaks out with Tesla leading the way. The fintech is already boosting to a radical shift in the banking industry. And genomics is close to revolutionizing the entire health sector.

It seems like the perfect storm is coming.

For more than 100 years, we assisted to a slow evolution of the last technology disruption. It enabled us to have electricity, a telephone, and an internal combustion engine at our disposal.

Now, we have artificial intelligence, deep learning, and genomics. We have cryptocurrencies, streaming, self-driving cars, cloud computing, and energy storage. All these technologies are invading our homes.

I think we’re a privileged generation. I’m enjoying millions to have the chance to analyze great companies and technologies.

If you are like me, a compulsive optimistic, you’ll feel the same vibe.

Let us see what the next episodes will bring us.

A great reset? A Bitcoin regulation? Tech companies destroying post-industrial revolution industries?

It’s like predicting the stock market.

I don’t know. You don’t know. Nobody knows.

Stay safe and enjoy the journey.

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.

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