We’ve all heard the lame excuses – cryptocurrency is only good for criminal activity, cryptocurrency is only useful for money laundering, cryptocurrency has no real purpose – in trying to derail crypto as a legitimate alternative to fiat. Of course, the statements need to always be taken with a grain of salt and the speaker needs to be identified. In every case, the person uttering the words was a definite fiat pundit who either didn’t understand crypto or who was too imbedded with fiat to be able to see the bigger picture. The truth has begun to surface, though, and none of those arguments stand up to scrutiny. Japan has just given us another good indication of the fallacy behind the arguments.
The Japan Times reports that, according to an “official police document,” the country has seen a total of 340,000 suspected cases of money laundering activity or abuse this year in all types of financial transactions. Of this amount, only 6,000 transactions were related to cryptocurrency. Quickly crunching numbers, that means that only about 2% of all the money-laundering activity was found in crypto.
6,000 is still a big number, for sure. However, given the fact that 334,000 cases of money laundering were recorded through fiat, it’s merely a drop in the bucket. Measures are already being undertaken to help reduce the number more, but the fact that money laundering can still be so prevalent in fiat after centuries of existence shows how difficult the activity is to control.
Japan is working diligently to provide better oversight of cryptocurrency entities and exchanges. It is introducing a number of measures that will help prevent tax evasion and control initial coin offerings (ICO) and the Japan Virtual Currency Exchange Association (JVCEA), a self-regulatory entities overseeing crypto exchanges, has authority to patrol the industry, as well.
Any system anywhere in the world can be used positively or negatively – nothing can escape this, not even cryptocurrency. However, it has already shown itself to be a viable option and one that allows users to take back control of their own money. It is not “that thing that criminals use” or “an environmental disaster.” It is a legitimate type of currency that continues to be accepted by more and more merchants every day.
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While some individuals still don’t understand the role cryptocurrency has in a global economy, there are more and more signs showing how crypto is gaining a larger market share. This trend is only going to continue and substantially more adoption is expected in 2019. An entire country seems to be prepared to make the jump into digital currency and is forecast to see a drastic reduction in cash usage within seven years.
According to a report by the New York Times, half of the retailers in Sweden could quit receiving cash before 2026 rolls around. The country is already testing a state-backed digital currency (SBDC), the e-krona, which is being managed by Sweden’s central bank, Sveriges Riksbank.
The SBDC could pave the way for Sweden to become completely free of cash within a decade. The governor of Riksbank, Stefan Ingves, asserts, “When you are where we are, it would be wrong to sit back with our arms crossed, doing nothing, and then just take note of the fact that cash has disappeared. You can’t turn back time, but you do have to find a way to deal with change.”
Cash is dying in the country. The people know it and the government knows it. They believe it to be on a course toward dissolution that can’t be stopped, which is why a number of businesses and individuals have already begun to make the permanent switch to digital currencies.
While that trend will continue, no one expects the landscape to change overnight. There are still a number of reasons why cash may have to be used, but those reasons are being addressed. As it happens, though, some caution that the country needs to ensure that it considers all the implications of a cash-free society. Mats Dillén, an economist and head of a Parliament committee studying the financial landscape in the country, states, “We need to pause and think about whether this is good or bad, and not just sit back and let it happen. If cash disappears, that would be a big change, with major implications for society and the economy.”
Sweden isn’t the only country going through this evolutionary cycle. The Marshall Islands are set to introduce a digital currency that would be legal tender, and several Asian countries are also experiencing substantial crypto adoption. Cash is becoming more of a rarity in Japan and South Korea, as digital payment networks become mainstream in the countries.
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First, Visa and MasterCard settled a class-action lawsuit over price fixing that reportedly cost the credit card giants as much as $6.2 billion. Now, reports are surfacing that major banks could be fined as much as $400 billion by 2020 for malpractice. So much for crypto being the bad guy, as traditional finance pundits would have everyone believe.
Quinlan and Associates indicates that research into US and European banks could potentially face the huge fines by regulators. The majority of the penalties are a direct result of the financial crash from 2008. The $400 billion does not include fines from other areas, such as unfair billing practices or money laundering.
This past Monday, JP Morgan Chase was fined by the Commodity Futures Trading Commission (CFTC) $65 million after it was found guilty of not doing enough its part to protect the US Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX) from 2007 to 2012. ISDA was established in 1998 and ISDAFIX is a reference rate value for fixed interest swap rates, correlated to dollars, pounds, Swiss Francs and Euros.
The CFTC said that JP Morgan published false interest rates just prior to the daily reference was captured between the five-year period. In submitting false data, the firm saw its derivatives positions benefit at the expense of other interest rate products that used the same common interest rate value.
BNP Paribas also received a hefty fine from the CFTC. The bank was ordered to pay $90 million after investigators determined that traders in the bank’s investment wing were actively bidding and executing trades at the moment the ISDAFIX was being released. This enabled them to influence the index, which impacted foreign exchange benchmark rates. The CFTC also fined the Royal Bank of Scotland $85 million for illegal practices similar to those of JP Morgan and BNP.
Some may recall that another bank, Well Fargo, has had its share of financial difficulties and missteps every year for the past couple of years. Most recently, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau hit the bank with fines of $500 million each after they determined that the bank had set unfair mortgage interest rates and forced customers to sign up for unnecessary car insurance.
Traditional financial giants may try to argue against crypto until they turn blue, but the truth is that crypto offers better protection and more transparency – and more confidence – than do the banks.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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