By Rémy Demichelis |
On 01/21/21 at 12:02 pm
| Updated on 21/01/21 at 18:28@RemyDemichelis
On the stack side, BlackRock has the firm intention to invest in the most famous cryptomoney. On the flip side, U.S. Treasury Secretary Janet Yellen is concerned about the use of cryptosystems to finance criminal activities, and she is not alone.
At $32,800 on Thursday, Bitcoin now appears to be moving away from its all-time high of over $41,000 reached on January 8. Nevertheless, it remains in the spotlight. First there is BlackRock, which has made official its firm intention to invest in the cryptomoney market. Finally, not quite: for the time being, it is only a question of using derivatives and not of buying Bitcoins directly, a piece of information spotted by our colleague from Capital.
The world’s largest fund manager, with 8.680 billion dollars in assets, has submitted a memorandum to the US Securities and Exchange Commission to stipulate that two of its funds (Strategic Income Opportunities and Global Allocation) could invest indirectly in cryptomoney. « Each fund may use [derivatives], which are financial instruments that derive their value from one or more currencies (including Bitcoin), » it says. For example, futures contracts, i.e. contracts that fix a price at a certain maturity of the underlying.
Already in December, Larry Fink, BlackRock’s CEO, showed a sign of openness by stating that « having a digital currency [made] the dollar less relevant ». A few weeks later, we learned that the American firm was recruiting a blockchain specialist.
BlackRock is not alone in wanting to diversify its portfolio with Bitcoin. A little less sensational, but just as significant, Miami Mayor Francis Suarez said last week that he wanted to put part of the city’s savings into cryptography. He is even considering allowing his constituents to pay their taxes in Bitcoin. However, there is still a long way to go before there is unanimous support for cryptomoney in the upper echelons of government.
Miami Mayor @FrancisSuarez: « We’re looking at…creating a regulatory framework that makes us the easiest place in the US to do business…in cryptocurrencies…We’re looking at…being able to make payments in crypto, in #bitcoin in particular. Being able to pay your taxes… » pic.twitter.com/vOXFvdBgon
Yellen and Lagarde remain reticent
Janet Yellen, soon to be Secretary of the US Treasury, said on Tuesday, during her hearing before the Senate when she took office, the following: « Cryptomoney is of particular concern. I think a lot of them are being used, at least as far as transactions are concerned, for illicit financing and I think we really need to look at ways in which we can reduce their use and make sure that […] money laundering is not happening through these channels. « That was her response to a question from a senator who asked her about the use of cryptography for terrorist financing.
Bitcoin is also a matter of concern for Christine Lagarde, President of the European Central Bank. She considers that « it is a highly speculative asset that has carried out some strange [funny business] and interesting and totally reprehensible money-laundering activities ».
Terrorist financing would be marginal
However, according to the first conclusions published this week of a report by Chainalysis, criminal activities linked to cryptomoney represented only 0.34% of trade in 2020 (2.1% in 2019), or 10 billion dollars. A provisional estimate, the authors say, as time passes, more and more addresses used for illegal purposes should become known.
Nevertheless, « the crime linked to cryptomoney is falling, and it remains a small part of the whole economy of this ecosystem, » says Chainalysis. The company specializing in security and support on the crypto markets says that most of the reprehensible activities are related to scams or exchanges on the darknet (an online buying and selling space outside authorized channels). However, it notes the very strong increase in ransomware that manages to be paid with cryptomoney: +311% in 2020, whereas this activity concerns only 7% of all illicit transactions. The financing of terrorism, which is often pointed at, seems to be marginal, however.
Chainalysis arrives at these conclusions by studying wallet addresses, which are often but not systematically anonymised on the blockchain (Bitcoin for example). They are pseudonymized and sometimes even made public by their holders.
By then analyzing the exchanges, which are recorded in registers accessible to everyone (always with Bitcoin), it is possible to track the money, just as with marked notes. Chainalysis thus discovered that a French computer scientist, who has since passed away, had participated in the financing of the American extreme right, to the tune of 28.15 BTC, a value of more than $500,000 at the time of the transaction. The donation took place in December, a few weeks before the Capitol riots. An attack described by many as terrorist.