Regulators like the FATF are going to continue to make decisions surrounding Bitcoin, so Bitcoiners should seek to have input.
This is an opinion editorial by Kevin Murcko, CEO and founder of Coinmetro.
On October 12, 2022, I was honored to speak at Bitcoin Amsterdam’s panel session titled “FATF And The Threat To Bitcoin Privacy.” With my fellow speakers, we dove into the evolving role of the Financial Action Task Force (FATF), and its relationship to Bitcoin. It’s so important that we understand both sides of the argument if we are to create a world where both the ideological and the practical implementation of Bitcoin will match the original intentions outlined in Satoshi Nakamoto’s now-famous white paper.
As an overview, the FATF was created in 1989 by the G7 to gather data on money laundering, almost 20 years prior to the birth of Bitcoin. As time went on, the FATF evolved into a policing body tackling all illicit money movements. During this time frame, Bitcoin came into creation and moved into the mainstream with the launch of regulated exchanges and wallets. The co-existence of the FATF and Bitcoin throws up one of the most recurrent and contentious debates around cryptocurrencies: Whether they should be regulated.
The conference brought together less-than-popular arguments for working with legislators and regulators, with those of a technologist detailing the solutions evolving to solve regulatory issues, and welcomed insights from ideologues, arguing that the regulation of cryptocurrency service providers goes against its core concept of sovereign currency and privacy.
Seeing such diversity of opinions in one room made me reflect on the evolution of Bitcoin conferences themselves. I myself have been on stages and at meetups since the beginning of Bitcoin, and I notice how the dialogue within the sector has expanded. In their nascent days, conferences were all about ideology. Bitcoin was far less monetarily valuable and had very few use cases. So, discussions had to be led by the ideology of the change-makers looking to better financial markets and give people back their sovereignty when it comes to their money. That’s an amazing ideology, and it’s an ideology that hasn’t been lost.
But beyond ideology, to get where we are today, bitcoin and the Bitcoin network have matured and taken on more use cases. They have become full-fledged platforms and businesses with loyal consumer bases. And with this, comes an increased duty to the customer and the financial landscape in which they exist.
Hosting Bitcoin Amsterdam today, at a time when Bitcoin prices are not at an all-time high, is an important reminder of the average Bitcoin user’s conviction. If Bitcoin was at record value, we’d have unanimous support for the self-sovereignty ideology. Many of the people speaking at Bitcoin Amsterdam have not experienced losses recently — they have been in the game far longer and therefore are still in profit. But, most users are not in this position and the average consumer is still acutely aware of the volatility that comes with the currency. The “crypto winter” ushered in a consideration of what is preventing the mass global adoption of bitcoin, and how this can be overcome to attract a new wave of bitcoin users. This dip has prompted discussions of the business, regulatory and technological side of the digital currency, looking at practical ways to improve these facets.
However, given ideology is so central to Bitcoin, conversations are rarely had without reverting to its key tenets.
Sitting on the panel at Bitcoin Amsterdam, I sat in the middle of these diverse speakers, literally and figuratively. To me, all stakeholders want the same outcome. We all believe there should be a choice between using government-controlled currency and centralized payment vehicles and opting for channels that are run by a consensus model, in which users have self-sovereignty and are able to operate outside of the traditional powerhouses that run the world. In this world, there still needs to be oversight, because at the end of the day, nobody wants to see funds move into the hands of illicit, violent actors.
My own perspective is that change must start from the inside not from the outside. Many players, in the larger cryptocurrency space and in traditional finance, may see the regulator as an obstacle. But, we live in a world that requires law and order. And while the regulatory system is flawed, the only way to fix it is from within, having experienced its pain points firsthand.
In order to make a convincing case that commands the respect of traditional global finance, the Bitcoin community has to prioritize unity. All market players, be it exchanges, wallet providers or DeFi products, big or small, need to make their voices heard by engaging with regulators and legislators to educate them directly. Having our common end goal in mind, it is far easier to fight from the inside by sitting in one room with a dozen of regulators than trying to educate every single person on the planet about the virtues of Bitcoin and drive mass adoption that way.
Overall, the panel was a great opportunity to share my thoughts and views on the industry as it stands today. Yes, the Financial Action Task Force will continue to do everything it can to combat money laundering and illicit transactions, but if it continues to dictate the rules without the Bitcoin community at the table, the end result will not be what any of us want, ideologically or otherwise.
This is a guest post by Kevin Murcko. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.