Bankers fear that Bitcoin and altcoins hide illicit activities
CRYPTOCURRENCIES are likely to remain on the financial landscape, despite regulation.
The market capitalisation of Bitcoin and altcoins (alternative cryptocurrencies) has surged to $557 billion from only $25 billion at the beginning of 2017. At its peak, early January, the market cap was $820 billion. Bearish long-time Bitcoin and altcoin players maintain that prices could fall further. But they intend buying again, if the market falls and stabilises.
Many cryptocurrencies will fall by the wayside, but market leaders will survive and grow.
| Cryptocurrency Market Capitalisation | ||
| Price ($ million) | Capitalisation ($million | |
| Bitcoin | 11,314 | 190,774 |
| Ethereum | 1,072 | 104,420 |
| Ripple | 1.32 | 51,367 |
| Bitcoin cash | 1,660 | 28,189 |
| Cardano | 0.64 | 16,572 |
| Stellar | 0.60 | 10,571 |
| Litecoin | 181 | 9,944 |
| Neo | 141 | 9,135 |
| EOS | 14.5 | 9,089 |
| NEM | 0.96 | 8,552 |
| IOTAT | 2.45 | 6,720 |
| Dash | 811 | 6,316 |
| Monero | 318.8 | 4,968 |
| Tron | 0.07 | 4,559 |
| VeChain | 7.36 | 3,287 |
| Bitcoin Gold | 188.6 | 3,159 |
| ICON | 8.16 | 3,063 |
| Qtum | 41.2 | ` 3,011 |
| Ethereum Classic | 29.2 | 2,926 |
| Lisk | 22.49 | 2,605 |
Steven Mnuchin, US Treasury Secretary is focusing on cryptocurrency dangers. He is worried that they can be used for illicit activities. Bitcoin and altcoins must comply with anti-money laundering rules, he stresses.
“We want to make sure that the rest of the world have the same regulations,” Mr Mnuchin said.
Thomas Jordan, Swiss National Bank chairman also proposes strict regulations.
South Korean financial authorities have created a task force to monitor cryptocurrency exchanges. The aim is to scuttle money laundering and fraud.
Joseph Stiglitz, the Nobel Prize-winning economist, predicted that cracking down on “secret” Bitcoin use would “regulate it out of existence”.
“You cannot heavily restrict cash and permit anonymous instruments that finance all sorts of transactions,” he said.
“We have a good medium of exchange called the dollar. We can trade in that. Why do people want Bitcoin? For secrecy.”
Prof Stiglitz’s argument has not convinced Cryptocurrency and gold enthusiasts . They reason that excess money and credit plus long term US dollar depreciation, have devalued fiat money.
The global banking system has also become intrusive, they say. Monero and Cardano altcoins, for example, offer privacy for buyers and sellers who wish to remain anonymous. Cryptocurrencies are thus an evolution of money.
They allow instant and unrestricted transfer of value without a bank or any other middleman. Since they are neither created nor controlled by governments or financial institutions, their value cannot be artificially manipulated. Their main problem, however, are thin markets and considerable volatility. They are thus dangerous investments.
Bitcoin, Ethereum, Ripple, Cardano, Stellar and Litecoin and the rest of the 20 cryptocurrency leaders account for $479 billion, or 86 per cent, of the overall cryptocurrency market. This is a tiny percentage of global currency, bond, stock and commodity markets. Regardless, central banks won’t be able to wish away the decade old innovation.
This article was first published in The Business Times, Singapore
Neil Behrmann is London correspondent of Business Times. Jack of Diamonds his thriller on global diamond mining and smuggling, will be published in coming weeks. It is the stand alone sequel to Trader Jack, The Story of Jack Miner. Amazon Kindle Scout selected Jack of Diamonds for potential publication. Readers play a part in choosing the book for publication and can nominate it. See The first two chapters at: https://kindlescout.amazon.com/p/2O1J42IMJ2KUQ