New European proposals would go after non-banking payment methods in an effort to curb the flow of money to terrorist activities. Meanwhile in America, the first debit card for bitcoin just became available.
It’s a bit jarring to read Reuters’ report about the EU’s desire to clamp down on unregulated monetary systems next to Wired’s article on the debut of the new Coinbase debit card. The EU is grasping at whatever straws it can to deflect responsibility from the massive failure of the intelligence community that the attacks in Paris indicated. Over at the other end of the spectrum, Coinbase’s card represents a shiny happy future of unbridled exchange that seems removed from the realities of geopolitics and of cryptocurrencies.
According to Reuters, the European Commission, the EU’s executive arm, will be urged to “strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards.” Some pundits have suggested this will eventually mean a flat-out ban on cryptocurrencies in those territories: “The European Union is set to let the terrorists win and strike a blow against freedom,” blares SiliconAngle.
The demonizing of Bitcoin and its ilk is akin to the hand-wringing by politicians and the media over encryption’s contributions to terrorist activities: a lot of panic and blame, very little definitive proof. While EU authorities are currently investigating whether cryptocurrencies played a part in funding the Paris attacks, at this point it’s complete speculation. It’s unclear how a complete ban or even regulatory measures would be imposed in Europe, but it’s not unfathomable to think that the jittery people in charge will try.
So it’s odd to switch over to Wired’s Coinbase card coverage, where Bitcoin is celebrated for its ability to provide “a far easier means of moving money across borders, from one country to another,” the very reason EU authorities are so freaked out. The Coinbase article lauds Bitcoin as a “decidedly democratic money system” precisely because it is not controlled by “big governments and big banks and big credit card companies.”
Coinbase is a startup and Bitcoin wallet operator. The company wants to make Bitcoin more accessible and usable in everyday situations through its new debit card, which draws on your Bitcoin wallet for transactions. It’s been approved for use in 25 US states, having acquired the necessary regulatory approval there. Coinbase hopes that its users will stop simply speculating with their Bitcoin and start spending it daily, and sees a future where workers are paid in Bitcoin and it’s possible to exist on the cryptocurrency alone.
Wired also makes note of the Reuters EU report and decides that the use of Bitcoin and other digital currencies to fuel terrorism “hardly characterizes the movement as a whole,” which is the nuance that seems to be lost on the European Union. Yet equally lost in the glowing Coinbase coverage is that Bitcoin by its free-wheeling nature can be unstable, a currency subject to paranoia and disasters of the Mt. Gox variety. And if terrorist activities can be traced to cryptocurrency funding, paranoia on the government side is only going to grow.
My takeaway from the various muddled narratives and shouting about virtual money systems: they’re here to stay, and they’re getting stronger and more prominent. You know something is truly part of the international zeitgeist when those in power look to reign it in or forbid its use entirely. Maybe I should look into adding the Coinbase card to my real-life wallet.
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