The assumption of the benefits of using bitcoin in criminal activities runs counter to the basic characteristics of the blockchain technology that underlies it. This was stated by the co-founder of the Silver Lake investment company Glenn Hutchins at the World Economic Forum in Davos, reports Finextra.
“Bitcoin, however, leaves a permanent, unalterable record, hence why almost all criminals using it are caught. It is fundamentally wrong to say that Bitcoin is mostly used for crime.” Hutchins said.
At the same time, he recalled that up to 90% of the US $ 100 bills issued by the US Federal Reserve are in one way or another related to organized crime and tax evasion:
“There is a very good reason for that – they’re untraceable and fungible,” he explained.
Glenn Hutchins emphasized that cryptocurrencies are a fundamental innovation, and smart contracts open up a whole new way of using blockchain by governments and companies.
Recall that at the end of 2019, analysts at Chainalysis linked 1.1% of cryptocurrency transactions in value terms to illegal activities. In 2020, this figure dropped to 0.34%, and the share of crime-related transactions in the DEX turnover was 0.02%.
Earlier, the Governor of the Bank of England, Andrew Bailey, speaking at the WEF, said that the volatility of cryptocurrencies cannot guarantee stability that would allow them to be used as a means of payment in the long term. However, he acknowledged that blockchain solves the problems of speed and cost of processing payments in the traditional financial system. He supported countries in discussing the benefits of stablecoins and central bank digital currencies.