Worst Practices of Crypto Addressed By Major Tech Companies and International Organization to Foster Global Monetary Cooperation, Secure Financial Stability, Facilitate International Trade, Promote High Employment and Sustainable Economic Growth, and Reduce Poverty Around the World. Bearish?… Maybe if You are a Criminal. Otherwise, not so Much; Or, Google and IMF Bitcoin FUD.
Google, like Facebook, is banning crypto ads in June. Meanwhile, the head of the IMF called for a global crackdown on money laundering and the financing of terrorism while noting the importance of cryptocurrency and its technology.
This is awful news if you are running a crypto scam that relies on AdWords, laundering money, or financing terrorism.
If however, you are just a normal human who is, for example, interested in encryption, digital currencies or doesn’t like the idea that would-be investors are getting suckered into scams like Bitconnect after seeing an ad on Facebook or Google then the situation is slightly more nuanced.
After all, Google isn’t banning Bitcoin, Coinbase, or cryptocurrency as a concept, they aren’t (at least I hope not) striking crypto search terms from their search, they are just banning crypto ads. This seems to be about Google not wanting to jeopardize a major part of their business over things like Bitconnect, shady ICOs, and other such scams. Just as it was with Facebook, it isn’t a big deal outside of very specific circles (namely for those who are trying to buy ad space on Google).
Meanwhile, the IMF isn’t bearish on Bitcoin because it is a blockchain based digital currency or volatile investment, they are bearish on criminals using digital currency to circumvent the rule of law.
If anyone is surprised by a major tech company banning scam ads, or by the IMF not being a fan of money laundering, then they likely haven’t been paying attention to the world as it is and has been.
To understand the intention of these positions it isn’t enough to just read the headlines. We have to take into account what has been said officially.
With Google, it is pretty clear. Their position is very impersonal and can be gleaned from a section of their blog which lists policy changes for Ads: “Financial Services: New restricted financial products policy (June 2018).”
According to the post they are banning:
- Contracts for Difference
- Rolling spot forex
- Financial spread betting
- Binary options and synonymous products
- Cryptocurrencies and related content.
So really what is this? This is a ban on speculative finance like Forex and Crypto not “a crypto ban.”
One must assume that this measure is meant to protect their core ad business given all the predatory products and bad players in the speculative finance vertical. It is high risk / high reward for users, and it is high risk / low reward for Google. So for the time being, Google is laying down strict rules (subject to change, like any such policy).
The ban starts June 2018.
On the IMF. It is the same position they have taken over and over again. That is, blockchain good, digital currencies (fine, and frankly an important technology of the future that we need to let develop), but criminals who circumvent the global financial system using digital currencies are “bad.”
This position can be understood by reading IMF head Christine Lagarde’s blog post: Addressing the Dark Side of the Crypto World.
This can’t be news every time it happens. And, to the extent that it is news, let’s not forget that cracking down on the worst of what crypto has to offer while otherwise getting general approval from the world’s most powerful players (banks, states, big tech, etc) is arguably a good thing for most of us.
There is a grey area, where figures who aren’t good or bad but aren’t operating completely within the law, lurk in the deep web. I think we can argue on the merits there. However, most of us are going to agree that a ban on things like the Silk road, money laundering schemes, and Bitconnect is preferable to a ban on exchanges, Bitcoin, or the development and use of digital currencies in general.
I’ll leave you with a quote from the IMF post:
Whether Bitcoin’s value goes up or Bitcoin’s value goes down, people around the world are asking the same question: What exactly is the potential of crypto-assets?
The technology behind these assets—including blockchain—is an exciting advancement that could help revolutionize fields beyond finance. It could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries.
The possible benefits have even led some central banks to consider the idea of issuing central bank digital currencies.
Before we get there, however, we should take a step back and understand the peril that comes along with the promise.
We can begin by focusing on policies that ensure financial integrity and protect consumers in the crypto world just as we have for the traditional financial sector.
Indeed, the same innovations that power crypto-assets can also help us regulate them.
To put it another way, we can fight fire with fire.
Regulatory technology and supervisory technology can help shut criminals out of the crypto world. More broadly, we are seeing crypto-asset exchanges in some countries that are subject to know-your-customer requirements.
These advances will take years to refine and implement. Two examples highlight the promise of this approach over the long term:
So, to paraphrase, she says roughly, “before we get to the point of mass adoption we should take some measures to address the worst parts of digital currency. You know what would be really useful in doing this? The technology behind cryptocurrency.” Oh my, how bearish, she makes a case for cracking down on the worst parts of crypto by using crypto related tech because it is useful.
NOTE: In other slightly related news, The Winklevoss twins are floating an idea for a “Virtual Commodity Association” focused on cryptocurrency which would be a self-regulatory organization designed to police digital-currency markets and custodians. The same general idea is here. That is some degree of oversight that isn’t overbearing that helps spur on further adoption by addressing the worst aspects of crypto in a way that doesn’t hamper the market. See that blog post at Gemini: A Proposal for a Self-Regulatory Organization for the U.S. Virtual Currency Industry.
Bottom line: We can get scared of anything. We can see that crypto prices aren’t at all-time highs or that Google and the IMF aren’t endorsing every aspect of crypto and crawl under a rock. Or we can be stoked about the future of digital currencies and their technologies and brush our shoulders off. I’m more of a fan of the shoulder brushing personally, especially considering we went from crypto being on shaky ground a year ago to it being widely embraced today. If the current thinking is “no on Bitconnect or financing terrorism, but otherwise yes, this is an important part of the future,” then by many measures this is a win.
- Bitcoin Falls on Bad News From Google and the IMF. Fortune.com.