The Big Question- How to avoid cryptocurrencies from becoming next "Swiss bank accounts"?
Jan 30, 2018 Posted / 737 Views
In recent interviews, British Prime Minister Theresa May and his Indian counterpart Narendra Modi expressed their concerns over the use of cryptocurrencies. Surely, the governments all around the globe are alarmed as to how virtual currencies are slowly being used to move money offshore. For instance, David Drake, a New York-based businessman, who has $10 million in cryptocurrency and blockchain. Like many people, he is using the digital money as an overseas bank account, where he can accumulate his profits without paying for hefty taxes.
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The States (US) Congress held hearings this month pertaining to digital assets and after listening to Treasury Secretary- Steven Mnuchin summoned the world’s 20 largest economies to work together and make certain that cryptocurrencies don’t “become the next Swiss bank account.” The woes are escalating after a triumphant global clamping on tax havens in traditional banking. David Drake also serves on the boards of 25 public and private firms, when asked about his opinion commented
“Every country is scrambling to come up with an answer.”
He further adds
“There needs to be a regulated structure that won’t kill the industry.”
We have seen lately that criminals are using it as their funding resources. In fact, criminal hacking and mining have risen steadily. One study by the Foundation for Defense Democracies, a non-partisan Washington intelligentsia says that the immediate adopters of the digital currencies were criminals, and their association has risen undeviatingly. The survey reveals that the next set of adopters were kind like Drake follows the law by reporting his companies’ holdings. However feel that it needs better oversight to help legitimize the industry.
Lately, the governments cracked down on traditional banking methods to hide your assets and finances from taxation. This in particular lead to the demand for new ways to deceive them.
The new and stricter enforcement laws have been constructed that push for “know-your-customer” and anti-money-laundering laws. The governments have also successfully persuaded offshore financial institutions to expose their client information. This attack urged many mainstream financial firms to restrict their customers’ access to Switzerland’s secretive banking system. Hence, this crackdown has triumphantly made it arduous to conceal funds from the government, courts, spouses or other prying eyes back home.
Nonetheless, even Cryptocurrency exchanges are covered by the rules, however, enforcement hasn’t been compatible, specifically outside of the U.S. boundaries.
The usage of digital money to secure assets offshore is emerging and unfolding swiftly. Now there are even new coins that are specifically designed for this purpose. The new range of tokens is called "Privacy coins" which includes like of ZCash and Monero. These coins are gaining high popularity these days because they utilize methods like encryption to make them untraceable. Grayscale Investments, a New York-based firm that’s offering a ZCash Trust to investors, reports that roughly $10 trillion is held offshore globally. The fresh statements given by the ZCash asserts that the company could capture as much as 10 percent of that by 2025 (says Grayscale’s Matthew Beck).
Of all virtual currencies- Bitcoin is the one that enjoys huge popularity and is said to provide anonymous transactions. However, it can be traced, with the electronic public ledger called blockchain keeping track of every transaction. Even though all that’s revealed to buyers and sellers are strings of letters and numbers, law enforcement has developed technology to track and seize illicit Bitcoins.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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