Fed: ‘We Recognize The Power Of Technology And Innovation To Transform The Financial System’

An US Federal Reserve official who’s in the board of governors thinks one in four people making Bitcoin (BTC) transactions are doing something illegal.

At a panel speech that honored Benoît Coeuré, one of Europe Central Bank’s (ECB) executives, Lael Brainard talked about how she sees the risks cryptocurrencies are posing.

Brainard Thinks Crypto Exchange Security is Problematic

At the Frankfurt, Germany, Monetary Policy: The Challenges Ahead event, one panel discussion was about the illegal activity involving Bitcoin. Brainard cited one of the academic studies released earlier this year and talked about how many Bitcoin users are criminals. Lael Brainard said,

“Only a third of the most popular exchanges require ID verification and proof of address to make a deposit or withdrawal. This is troubling since a number of studies conclude that cryptocurrencies support a significant amount of illicit activity. One study estimated that more than a quarter of bitcoin users and roughly half of the bitcoin transactions, for example, are associated with illegal activity.”

There Are Misconceptions on How Bitcoin is Being Used in the Real World

Brainard’s speech did nothing but to add to the misconceptions on how the Bitcoin is being used in the real world. Studies on transactions usually arrive at all sort of opposing conclusions, with many voices saying criminals prefer cash over cryptocurrencies. Problems appear when having to determine how many Bitcoin users are out there, since a user has control over how many addresses he or she wants. Brainard decided to talk just before the European Union will impose new crypto regulations. Besides, Coeuré has also expressed criticizing opinions on Bitcoin, describing the coin as the “evil spawn of the financial crisis.”