When hackers tied up the Colonial Pipeline for $4.4 million in ransom earlier this month, the company paid it—in Bitcoin. That move, to get its fuel moving again, has prompted a lot of rumbling about how the cryptocurrency should be more tightly regulated.
But economist Ed Yardeni thinks a lot of governments will agree to actually ban Bitcoin and its kin. He pointed to a recent study by a group called the Ransomware Task Force. The group, which major Silicon Valley firms back, recommended that crypto “be more closely regulated,” although it stopped short of saying exactly what path to take.
“I have to believe that the group considered recommending banning cryptocurrencies altogether but couldn’t agree to do something so radical,” economist Yardeni wrote on a LinkedIn post. “I will not be surprised if more governments do just that.”
A lot of baleful talk is surrounding crypto these days. The high level of suspicion about it in top government circles may well portend what Yardeni is talking about. Perhaps as a result, Bitcoin is down 40% from its April high.
Turkey’s central bank has outright banned crypto, which it says is too volatile and makes recovering losses hard for investors. In India’s parliament, there’s a bill to prohibit the currency that stands a decent chance of passage; proponents say the digital denominations are a haven for illegal payments. In addition, some 10 other nations, including South Korea and Egypt, are eyeing similar strictures.
There’s talk that the US Treasury Department is thinking about cracking down on financial institutions that traffic in the digital currencies, suspicious that they are enabling money laundering. Both Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde have expressed dim views on crypto and its use by criminals. Bank of England Governor Andrew Bailey has stated that the cyber money has “no intrinsic value.”
And the Internal Revenue Service (IRS) is seeking to find taxpayers who use the currency to evade what they owe Uncle Sam. In China, the regime has pledged to suppress Bitcoin mining, which it said enhances global warning due to the enormous amount of power that extracting the currency entails.
In a previous post, Yardeni wrote that: “I had been thinking of cryptocurrencies as ‘digital tulips,’ reminiscent of the 17th century tulip mania in Amsterdam that drove up tulip prices beyond reason. The difference is that cryptocurrencies are traded 24-by-7 around the world.”
After all, even Elon Musk has done a 180 on Bitcoin and its ilk.
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Tags: Bank of England, Bitcoin, China, Colonial Pipeline, Cryptocurrency, Ed Yardeni, Egypt, Elon Musk, Internal Revenue Service, Janet Yellen, ransom, South Korea, Turkey