Davos forum participant refutes bitcoin’s convenience for criminals

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The assumption that the first cryptocurrency is advantageous for criminal activity runs counter to the basic characteristics of the blockchain technology that underpins it. Glenn Hutchins, co-founder of investment firm Silver Lake, said this at the World Economic Forum in Davos, Finextra writes.

„Bitcoin’s blockchain creates a permanent unchanging record of the transaction, so the movement of funds is easy to trace. To claim that bitcoin is mainly used for crime is fundamentally wrong,“ Hutchins said.

However, he recalled that up to 90% of the US Federal Reserve’s hundred dollar notes issued are linked in one way or another to organised crime and tax evasion:

„There is a good reason for this – the dollars are untraceable and interchangeable,“ he explained.

Glenn Hutchins stressed that cryptocurrencies are a fundamental innovation and that smart contracts open up a whole new way for states and companies to apply blockchain.

Recall that at the end of 2019, Chainalysis analysts linked 1.1% of cryptocurrency transactions in value terms to illicit activity. In 2020, this figure dropped to 0.34% and the share of criminal-related transactions in DEX turnover was 0.02%.

Earlier, Bank of England Governor Andrew Bailey, speaking at the WEF, said that the volatility of cryptocurrencies could not guarantee the stability that would allow them to be used as a means of payment in the long term.

However, he acknowledged that blockchain solves the problems of speed and cost of payment processing in the traditional financial system. He supported countries in discussing the benefits of steiblockchain and central bank digital currencies.