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posted by Fnord666 on Monday December 19 2016, @10:11PM   Printer-friendly
from the so-right-now-it's-virtually-disruptive? dept.

Arthur T Knackerbracket has found the following story:

The ora, paper money pegged to the South African rand, is one of hundreds of alternative currencies issued for mainly political reasons, but many of the newer currencies are increasingly virtual—digital representations of money consisting of nothing more than computer code. Most prominent among them: bitcoin, which, like conventional currency, can be traded online, transferred, stored or exchanged for cash. But, unlike conventional currency, it lives primarily on the internet, secured by layers of computer code.

This suits bitcoin users just fine. They want a secure way to exchange money by laptop, mobile phone or email. Yet so do terrorists and criminals, whom the U.S. government worries might develop and deploy their own uncrackable virtual currencies. Newsweek has learned hundreds of experts inside the nation's defense and intelligence agencies, as well as private-sector researchers in finance, technology and various think tanks across the country—some of them under contract with the U.S. government—are now investigating how virtual currencies could undermine America's long-standing ability to disrupt the financial networks of its foes and even permanently upend parts of the global financial system.

"There is a real danger and a challenge here with respect to virtual currencies," says Juan Zarate, a senior adviser at Washington think tank Center for Strategic and International Studies and on the board of advisers for San Francisco's Coinbase, one of the most popular virtual currency exchanges in the world. "And it runs contrary to the very fundamentals of the transparency and accountability that we've tried to build for the last three decades to tackle terrorism, human trafficking, money-laundering and many other types of criminal activity."

[...] The biggest concern the U.S. has about virtual currencies, Zarate says, is that terrorists and other enemies might create one so powerful and so untrackable, that they'll no longer need the global banking system, which the U.S. uses to financially starve them. This has yet to happen, but America's defense and intelligence agencies are already trying to figure out how they might infiltrate or block such a malicious financial network.

-- submitted from IRC


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  • (Score: 3, Insightful) by ticho on Monday December 19 2016, @10:56PM

    by ticho (89) on Monday December 19 2016, @10:56PM (#443417) Homepage Journal

    Zarate says, is that terrorists and other enemies might create one so powerful and so untrackable, that they'll no longer need the global banking system, which the U.S. uses to financially starve them. This has yet to happen, but America's defense and intelligence agencies are already trying to figure out how they might infiltrate or block such a malicious financial network.

    (Emphasis mine.) Notice how "untrackable" is being automatically considered "malicious". Disgusting.

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  • (Score: 5, Insightful) by krishnoid on Monday December 19 2016, @11:07PM

    by krishnoid (1156) on Monday December 19 2016, @11:07PM (#443420)

    Zarate says, is that terrorists and other enemies might create one so powerful and so untrackable, that they'll no longer need the global banking system, which the U.S. uses to financially starve them. This has yet to happen, but America's defense and intelligence agencies are already trying to figure out how they might infiltrate or block such a malicious financial network.

    I have to wonder if that's one step behind the real issue here -- not so much that 'enemies' are using it, but that it's a threat to the control that global banking exerts has over currency, and therefore the control that a central authority can have over peoples' actions.

    • (Score: 2) by Phoenix666 on Tuesday December 20 2016, @01:39AM

      by Phoenix666 (552) on Tuesday December 20 2016, @01:39AM (#443479) Journal

      That's exactly why they're watching it. If more people catch on, it's a mortal blow to the bankers.

      --
      Washington DC delenda est.
      • (Score: 2, Interesting) by Anonymous Coward on Tuesday December 20 2016, @02:09AM

        by Anonymous Coward on Tuesday December 20 2016, @02:09AM (#443498)

        Good guess, but wrong.

        Bankers don't give a damn.

        Bankers can deal with deposits, loans and transfers in many currencies. They do it today.

        Profitably, even.

        What's scaring Uncle Sam here is that just maybe his (historically fleetingly brief) window of dominance owing to international banking may be coming to an end.

        News flash: it's already ending. People deal with all sorts of trading schemes already (for fun and profit, see how islamic pilgrims tend to do it), and large companies are already working in terms of commodities or contracted assets; the multinational's equivalent of the swap shop, if you like. They've even done it (I'm about to shock you, I can tell) through what in the underground economy would be called money laundering schemes. Buy 50,000 tonnes of pig iron in location A, sell it (at a modest loss) to counterparty in location B in a more desirable (for some reason) currency, take tax cut on loss, collect a cut of profits from stock owned in the counterparty, do what you want with your crisp, fresh currency. The pig iron need not even leave the heap/yard/railway/warehouse where it sits.

        And so on, and so forth. Fill in the blanks yourself.

        The fact that all sorts of transfers MIGHT not pass through the USA, and therefore MIGHT not be subject to US law, and therefore MIGHT be out of the reach of congressional handwringers who want to save the whales/save the atmosphere/save the children/save the addicts/choke some brown people whose faces they don't like is what is causing much sweating and incontinence on Capitol Hill.