Bye-bye, bitcoin: It’s time to ban cryptocurrencies

I’ve never quite understood why cryptocurrencies are worth anything. Of course, the untraceable payments are worth a lot to ransomware hackers, cyber criminals and money launderers. But dollars, euros and yen are backed by nations’ respective treasuries. If someone invents a cryptocurrency, any value is based solely on convincing others it has value. But is it a usable means of exchange? International banking officials say cryptocurrencies such as bitcoin are speculative assets, not sustainable, usable money.

Yet the epidemic of hugely disruptive ransomware attacks in recent months — on JBS Foods, a major meat processor; on Colonial Pipelines, our critical infrastructure, causing gasoline shortages for weeks; and on 1,000 or more U.S. businesses on July 4 — highlights the enormous risks. Moreover, hundreds of small towns, hospitals, school districts and small businesses have been hit by the ransomware epidemic — all enabled by cryptocurrencies.

How should governments respond? Besieged with cyberattacks, the Biden administration has been struggling with this question of cybersecurity with few clear answers. Cyber offense still seems to beat cyber defense.   

As the eminent economic analyst Martin Wolf outlined in a recent Financial Times essay, the risks and chaos of a wild world of unstable private money is a libertarian fantasy. According to a recent Federal Reserve paper, there are already some 8,000 cryptocurrencies. It’s a new mom-and-pop cottage industry.

How should governments respond? Wolf argues that central banks (e.g., the U.S. Federal Reserve) should create their own official digital currencies — central bank digital currencies (CBDC) and make cryptocurrencies illegal.

I’ve been asking the same question: Who needs cryptocurrencies? Apart from the nasty uses and wild speculative value swings, data mining to produce bitcoin is a serious environmental hazard, using huge amounts of electricity by rows and rows of computers.

Governments should guarantee safe, stable and usable money. Already, according to the Atlantic Council GeoEconomics Center’s CBDC Tracker, 81 countries representing 90 percent of world gross domestic product are at various stages of researching and exploring the adoption digital currencies.

The four largest central banks — the European Central Bank, the Bank of England, the Bank of Japan and the U.S. Federal Reserve — are all exploring CBDCs, though the U.S. lags behind. Meanwhile, China is already digitizing its currency, the RMB, and allowing foreign visitors to use it for payments. Though China is still a long way from having an international reserve currency to rival the dollar, its digitized RMB is a step in that direction.

Nonetheless, caution is well advised, as there are important, complex issues that must be sorted out before launching an official digital currency. These issues include equity: Should the digital dollar be available to all or just used for certain business transactions? I would argue it must be for all. Should a U.S. CBDC augment cash or totally replace it, and would there be a transition period? Then there is the impact on private banks: Should individuals have bank accounts with the Fed rather than private banks? What should be the relation between private banks and the Fed with regard to currency? Should businesses have “digital wallets”? How would international payments work?

And not least, there is the question of privacy and surveillance. A digitized dollar would likely make it hard to dodge taxes with untraceable cash. But just how traceable would the public and Congress accept a CBDC to become? Would the fact of a CBDC making transactions safer, faster and cheaper be worth some trade-off?

Then there is the question of whether the world’s major powers would cooperate in outlawing cryptocurrencies — and reach agreement on rules and regulations of CBDCs. China, always with an eye on control, has indicated skepticism, if not disdain, toward cryptocurrencies. Indeed, that was one driver in Beijing’s swift move to digitize the RMB. This could be an area of U.S.-China cooperation worth exploring.

If China were on board, the possibility of a U.N. Security Council resolution to ban cryptocurrencies could be in the cards. That would be a foundation for taking the issue to the Group of 20 to make it a global norm.

For now, there are a whole lot more questions than answers. But the insidious new industry of cyber hacking and ransomware is an unacceptable disruptive threat to American economic security. It is a problem that is growing, not subsiding. And the proliferation of do-it-yourself digital currencies is a serious and bad omen for global financial stability.

Yet amid an international order that is fraying and fragmenting, it’s an open question whether such threats are enough to catalyze sufficient international cooperation. But I suspect that with a little U.S. leadership, jump-starting financial diplomacy would go a long way. Certainly, it’s a good test for President BidenJoe BidenTrump hails Arizona Senate for audit at Phoenix rally, slams governor Republicans focus tax hike opposition on capital gains change Biden on hecklers: ‘This is not a Trump rally. Let ’em holler’ MORE’s efforts to align democracies.

Robert A. Manning is a senior fellow of the Brent Scowcroft Center for Strategy and Security at the Atlantic Council. He was a senior counselor to the undersecretary of State for global affairs from 2001 to 2004, a member of the U.S. Department of State policy planning staff from 2004 to 2008 and on the National Intelligence Council strategic futures group from 2008 to 2012. Follow him on Twitter @Rmanning4.

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Youth arrested for cheating bitcoin investors

A 25-year-old youth was arrested by the Hyderabad Cyber Crimes police on Saturday for cheating a person on the pretext of selling bitcoins. The accused, Akshay Gowda, is a native of Bengaluru.

Joint Commissioner of Police (Detective Department) Avinash Mohanty said that on April 8, one Manish Reddy P. approached their Cyber Crimes team stating that he was cheated to the tune of ₹3,14,526 by somebody on the pretext of selling bitcoins. Based on his complaint, a case was registered and police launched a probe.

The accused befriended bitcoin traders through Binance and Wzrix websites. Initially, he sold bitcoins to online traders after getting money transferred into his bank account.

“After selling bitcoins two to three times, he gained their confidence and started offering them a huge commission. Believing Gowda’s stories, the victims transferred huge amounts to his account,” Mr. Mohanty said. After receiving the money, he stopped responding to their calls and messages.

“People are advised to verify the credentials of online bitcoin traders,” police said.

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Bitcoin Is Failing Its First Inflation Test as Selloff Deepens

Bitcoin’s steep selloff is undercutting the argument made by the digital currency’s proponents that it’s an inflation hedge.

The original cryptocurrency has lost about half of its value since mid-April, fizzling after a spectacular rally that saw it surge above $60,000 from around $7,000 at the start of 2020. It traded Wednesday afternoon at $31,864, and got a small boost after Tesla Inc. boss Elon Musk said he has personal holdings of the cryptocurrency, as does his space company SpaceX.

The timing is ironic.

Bitcoin’s supporters for years have touted it as an inflation hedge like gold, mainly because the bitcoin network has a set limit on the number of units that can be created: 21 million. Their argument hadn’t previously been tested, however, because inflation has largely been under the Federal Reserve’s 2% target since bitcoin’s 2009 launch.

Now for the first time in years, shortages of semiconductors, lumber and workers are putting pressure on consumer prices, sparking worries about inflation. At the same time, governments and central banks have been forced to spend trillions to prop up their economies, potentially sapping the purchasing power of their currencies.

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Starling CEO sounds the alarm about bitcoin, other cryptocurrencies

Anne Boden, CEO of Starling Bank, speaking at Web Summit 2019 in Lisbon, Portugal.

Harry Murphy | Sportsfile for Web Summit via Getty Images

LONDON — Anne Boden, the CEO of British fintech start-up Starling, is worried about cryptocurrencies.

Some digital currency exchanges are “quite dangerous,” Boden said, adding the finance industry should remain vigilant about fraud in the unregulated crypto market.

It comes after Binance, the world’s largest crypto exchange, was banned from carrying out regulated activity in the U.K. by the country’s financial services watchdog.

“The industry as a whole must really be alert to the dangers of people using bitcoin and cryptocurrencies to process fraudulent payments,” Boden told reporters on a call Thursday.

Founded in 2014, Starling is one of Britain’s best-known challenger banks, a new breed of lenders aiming to shake up the market with online-only checking accounts. Rivals include Monzo, Revolut and Monese.

On Thursday, Starling reported a 600% jump in revenue in the 16 months ending 2021, helping the bank more than halve its losses.

Starling is now on track to record its first annual profit in 2022, Boden said, adding the company may go public by late next year or early 2023.


Despite her cautious stance on crypto, Boden said she believed there was a future for digital currencies.

“Certain digital currencies are interesting (but) our customers are not asking for that service,” Boden said.

“In 2-3 years’ time, things will have changed and most banks, including Starling, will be gearing up to do very interesting things in these areas,” she added.

Starling is closely following the Bank of England’s research exploring whether to issue a digital version of the British pound, Boden said.

The BOE is one of several global central banks exploring their own digital currencies. China is leading the way, trialing its digital yuan with millions of people.

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Celsius joins the Bitcoin Mining Council

As one of the largest US miners and investors in Bitcoin mining, Celsius expands its leadership in North American Bitcoin mining by joining BMC

LONDON, July 21, 2021 /PRNewswire/ — Celsius, the leading global cryptocurrency yield-earning platform, announced the company has joined The Bitcoin Mining Council (BMC), a voluntary global forum of Bitcoin mining companies and other companies in the Bitcoin industry.

Celsius Network (PRNewsfoto/Celsius Network)

BMC is a vital assemblage as the world mining power moves to North America from China and other countries. According to data from Cambridge University, the U.S. is now the second largest Bitcoin mining destination worldwide. Market share continues to shift toward North America following China’s crackdown on Bitcoin regulation in search of safe government regulation and low-cost power which increasingly comes from renewable sources.

The announcement comes after Celsius recently invested more than $200 million in mining equipment and positions in Core Scientific, a leader in customizable infrastructure and software solutions for Blockchain networks; Rhodium Enterprises, a leading mining company in Texas; and Luxor Technologies, a hashrate based software company. The financial commitment has made Celsius one of the largest investors in North American mining.

“We are honored to join the Bitcoin Mining Council and be part of their important effort to make mining more efficient and transparent,” said Alex Mashinsky, CEO of Celsius. “Celsius sees great opportunity to help secure the Bitcoin network as bitcoin mining migrates to North America and we are committed to promoting that trend while adopting sustainable energy practices along the way.”

First convened by Michael Saylor of MicroStrategy, BMC exists to promote transparency, share best practices and educate the public on the benefits of Bitcoin and Bitcoin mining. As a member, Celsius has agreed to voluntarily share energy mix and hashrate size for research and educational purposes, share best practices with its fellow miners, and promote Bitcoin’s core principles and tenets.

About Celsius
Celsius helps hundreds of thousands of consumers worldwide to find the path towards financial independence through a compounding yield service and instant low-cost loans accessible via a web and mobile app. Built on the belief that financial services should only do what is in the best interest of the customers and community, Celsius is a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. For additional information please visit

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Bitcoin Erases 2021 Gains. It’s the ‘Ultimate Risky Asset Right Now.’

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ARK Buys $53.6m Worth of Square After Jack Dorsey’s Bitcoin Announcement

A subscription to ARK Invest’s trade notifications has revealed a huge purchase of Square shares just after Jack Dorsey’s announcement about building DeFi on Bitcoin.

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China proves Bitcoin is an unstoppable machine: Bitcoin Center founder

China’s crackdown on Bitcoin (BTC) mining continues to face determined responses across the crypto ecosystem. One of the first BTC exchange operators and co-founder of Zap Protocol, Nick Spanos, said that the crackdown only proves Bitcoin is an unstoppable machine “if the world’s second-biggest economy can’t crush, devalue and manipulate Bitcoin.”

Noting that the crackdown is increasing scarcity due to there being fewer miners relative to the transaction volume, Spanos underscored the increase in miners’ profits while the mining difficulty continues to decrease. He explained:

“Bitcoin’s algorithm adjusts roughly every two weeks to allow one block of transactions to be mined every 10 minutes. So, it’s become both easier and more profitable to mine Bitcoin. That’s a recipe for enticing more miners back in.”

Spanos said miners moving out of China will seek to find a place with immediate neighbors, such as Kazakhstan, Iran and Russia. “Others in the region would also be well-served to seize this opportunity,” he added. Recently, one of the major mining groups operating in China announced its plans to move out of the country and distribute its mining operations among the United Arab Emirates, Canada, the United States, Kazakhstan and Iceland.

Spanos noted that Bitcoin’s price has always gone up once regulatory setbacks are “digested by the community.” 

Last week, Galaxy Digital CEO Mike Novogratz saw “a big net positive” for Bitcoin in China’s crackdown attempt. He said that the market crash from an all-time high followed by high volatility was a successful test for the crypto ecosystem as a whole.