Page 5 - Aequitas Europa

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B
itcoin has been a hot topic since almost its inception in 2009, particularly in the recent
years after lengthy periods of ridicule, disbelief, lack of understanding that eventually lead
to attacks by the media, governments, the established financial institutions and even
within the crypto community. Some claim that Bitcoin is successful due to its potential for
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circumvention and lack of oversight by governments . Its resilience is unheard of and despite
insatiable efforts to eradicate it off the face of the Earth, Bitcoin has proven numerous times that
is a force to be reckoned with.

During the last recession period, it became extremely The developing sociological impact alone is still nascent
hard to believe that a new form of encrypted currency but the effect on the financial establishment is spreading
would potentially help to “mitigate” these , arguably, rapidly as the adoption rate increases, moreover, it is
calculated financial crisis by the very same institutions apparent that the European Union regulatory bodies are
that we “trust” and reduce the tendency of financial threading carefully by evaluating the long-term dangers
titans throughout the world from inflating the economy and benefits of this revolutionary technology. But it was
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with fiat currency that will eventually indebt people, not always the case as heavy regulation was and still is in
businesses, small banks and governments in a vicious the agenda of power-hoarding organizations.
cycle that only the protected and powerful few will come
out unscathed, unpunished and profitable , as historically Regulation
suggested. The reason why this new ecosystem exists is
attributed to the inequities and the political decree on all In 2016 the European Parliament and the Council
fiat currencies that do not have intrinsic value since the requested Mario Draghi, the President of the ECB, to
departing it from the gold standard. The Euro never had release a written opinion on a proposal for an
that “golden” relationship as opposed to the Dollar or amendment in the Directive 2015/849 on prevention of
British Pound before the 70’s and that fact has introduced the use of financial system for the purposes of money
banks as the new rulers of the world with the super-ability laundering or terrorist financing, but the bank after
of printing money out of thin air that create financial addressing briefly the matters requested, went on
bubbles, debt and crisis. The solution that extensively to talk about the volatility associated with
cryptocurrencies offer is to invert the power structure “virtual currencies”, on how would affect the central
back to the consumer. banks’ control over money supply with potential risks to
price stability, and so on, basing its opinion from Article
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The decentralized nature of Bitcoin, meaning that no 127(4) and 282 (2) on the Treaty on the Functioning of
person or institution owns or has power over it, has the European Union, provisions that do not have any
become a very appealing feature amongst many others to substance on anti-money laundering or terrorism
which it has factored in to its increasing mass adoption. financing at all. Draghi even urged the regulators not to
But the most attractive feature of them all is the promote a wider use of “virtual currencies” while
underlying technology that supports this cryptocurrency following the Financial Action Task Force
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and other altcoins : the blockchain . Aside from the recommendations on tackling criminal groups that might
libertarian standpoint, the tech has a promising structure use “virtual or digital currencies”! His argument was
based on an open-source democratic ecosystem that somewhat limited on the issues raised by the European
highly values privacy, peer to peer transaction and a Parliament and the Council and exposed the actual threat
public distributive ledger where everyone can access but to the operative model of banks in general.
the data within is encrypted, secure and immutable.

1 https://www.bloomberg.com/news/articles/2017-11-29/bitcoin-ought-to-be-outlawed-nobel-prize-winner-stiglitz-says-jal10hxd
2 http://lexicon.ft.com/Term?term=fiat-money
3 https://www.investopedia.com/terms/a/altcoin.asp
4 https://www.investopedia.com/terms/b/blockchain.asp
5 http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-the-functioning-of-the-european-union-and-comments/part-3-union-policies-and-internal-
actions/title-viii-economic-and-monetary-policy/chapter-2-monetary-policy/395-article-127.html
6 http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-the-functioning-of-the-european-union-and-comments/part-6-institutional-and-financial-
provisions/title-1-institutional-provisions/chapter-1-the-institutions/section-6-the-european-central-bank/602-article-282.html