According to this banking insider, governments have it all wrong. Bitcoin is one of the least private assets on the market, and they should change the policy to swing the pendulum the other way. According to a banking insider, governments are harming their citizens with the current draconian measures, instead of protecting them. That sounds convenient for bitcoiners, of course, but this banking insider seems like the real deal.
He or she, on condition of anonymity, wrote essay for The Bitcoin Policy Institute. It begins: “Financial privacy—and, more specifically, the requirement to obtain informed consent before collecting and using others’ personal financial information—is essential to individual freedom.” From there it goes to Mordor and back. Is the banking insider on to something? Or is the banking insider just toeing the bitcoiner party line? Let’s examine what she or he said and find out.
But first, we should not separate this passage from the opening lines. She follows and complements them.
“Due to the twin threats of exponentially growing cybercrime and increased government surveillance and control of financial transactions, individual financial privacy is under attack and has been under attack on multiple fronts, and the true costs are beginning to manifest in noticeable ways.”
This is a very important topic and the world should discuss it thoroughly as soon as possible. This banking insider is doing governments a favor by explaining how privacy works in bitcoin. The essay also reads as a preemptive strike against possible Tornado Cash-like sanctions against the bitcoin network.
About the Author/ The Banking Insider
Normally we wouldn’t disrupt the flow of an article with author information, but this time it’s important. If readers don’t trust a banking insider, they won’t take his words of wisdom seriously. This person knows what’s going on.
“The author chooses to remain anonymous to protect his identity and the company he works for. They worked in several public financial institutions in the field of fraud prevention and mitigation; from field tactics to corporate strategy and policy.”
They also worked on “identity verification” and were involved in KYC and AML “compliance and reporting”. The banking insider currently works at the bank, helping them “prevent fraud and comply with existing regulatory guidance on customer identity”. Their warning to governments and citizens is as frightening as it needs to be.
“As someone who has seen identity theft change the lives of countless victims, I know how important financial privacy is to protecting consumers from the fraudsters and criminal networks that have proliferated over the past 15 years. Global fraud losses are estimated to equal 6.4% of global GDP, which will amount to a whopping $5.38 trillion in 2021. Experts cite protecting and securing personal financial information as one of the most important actions a person can take to mitigate these threats.”
And since we give credit where credit is due, The Bitcoin Policy Institute define yourself as “a non-partisan, non-profit organization exploring the political and social implications of Bitcoin and emerging monetary networks”.
BTC price chart for 09/22/2022 on FX | Source: BTC/USD on TradingView.com
Banking Insider on Privacy
According to a banking insider, “Cash provides the highest level of privacy.” Second, we have credit card companies or banks, in other words, “third parties that transact on our behalf.” By doing so, there is a “relatively high level of privacy” because those companies are “required by law not to disclose our transaction information to others without our consent.”
You know who’s in third place, “because Bitcoin is an open public ledger, users’ transaction history is publicly available to everyone.” The transparency of the Bitcoin network means that “anyone can see all past transactions associated with the funds at that wallet address—and in many cases, how many Bitcoins are in the wallet!”
This leads us to prevention. Just in case lawmakers are thinking about directing a Tornado Cash-like attack on bitcoin:
“Bitcoin users who do not want to share their entire transaction history or net worth when transacting with a merchant can use collaborative transaction tools to bring their financial privacy on par with their other payment methods. These tools provide a similar service to what Visa provides to its customers today; they protect the details of the transaction both from the other party to the transaction and from outside observers.”
Not only are collaborative transactions not a crime. They are absolutely necessary for the system to ensure privacy.
“These tools for collaborative transactions show a clear benefit to end users, but are viewed with suspicion by policymakers and financial institutions that enable crypto exchanges and services, as these tools are conceptually attractive to criminals who want to try to ‘break the chain’ of visibility into the sources of their funds. ”
Ultimately, the banking insider says only that bitcoin users deserve “the same level of financial privacy that Americans are legally entitled to for everyday transactions — regardless of how those individuals choose to pay or get paid.” And that the system is different enough to deserve a new set of rules. And that this is not a trivial matter.
“As Bitcoin users grow through regulated exchanges, lawmakers must ensure that their financial privacy is protected at the same level as all other regulated payment rails. If not addressed soon, the global threat that fraud poses today will only accelerate.”
Remember, “experts cite protecting and securing personal financial information as one of the most important actions a person can take to mitigate” privacy threats.
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