In recent months, Bitcoin (BTC) has been raising an alarm across the globe after its market capitalization surpassed the biggest companies in the world. A CEO of a well-established crypto exchange platform has warned that this can lead to a “crackdown” on cryptocurrencies.
Bitcoin is a decentralized currency that rose to fame in recent years. It surged to its all-time high levels amid the covid-19 pandemic. Several traders believed that the digital token can be used as a hedge against inflation. This was due to the stocks plummeting and fiat currency losing its value during to the Covid-19 pandemic.
However, major financial institutions and companies started endorsing Bitcoin and other digital currencies, driving its price to $60,000 as of this writing. Consequently, international watchdogs have become more anxious about the dangers that cryptocurrencies can cause.
For instance, U.S. Treasury Secretary Janet Yellen said that Bitcoin is used by criminals and warned that the digital token is being unethically used for money laundering and paying for illegal goods on the deep web. On the other hand, European Central Bank President Christine Lagarde argued that Bitcoin is being used for terrorist financing.
As a result, Jesse Powell, CEO of Kraken told CNBC in an interview that this can cause Bitcoin “crackdown”. As a matter of fact, the United States isn’t the first country to set rules on digital token. The Indian government is considering a ban on cryptocurrencies, and penalizing traders holding or trading the digital tokens.
Kraken, the 4th largest cryptocurrencies exchange
Kraken is the 4th largest cryptocurrency exchange in the world based on trading volume. The company will soon follow Coinbase’s steps and go through an initial public offering, according to a report by CNBC.
Additionally, Kraken’s chief said that he believes that doubts about cryptocurrencies are here to stay. This was due to regulatory actions by U.S. watchdogs such as a recent anti-money laundering rule that the U.S. government proposed. The rule obliges traders who hold their digital tokens in a private digital wallet to do an identity check if their transactions exceed $3,000.
“Something like that could really hurt crypto and kind of kill the original use case. Which was to just make financial services accessible to everyone,” Powell said.
“I hope that the U.S. and international regulators don’t take too much of a narrow view on this,” Powell said. “Some other countries, China especially, are taking crypto very seriously and taking a very long-term view.”
Kraken’s CEO said he feels the U.S. is more “shortsighted” than other nations and “susceptible” to the pressures of incumbent legacy businesses. In other words, the banks — that “stand to lose from crypto becoming a big deal.”
“I also think it might be too late,” Powell added. “Maybe the genie’s out of the bottle and just trying to ban it at this point would make it more attractive. It would certainly send a message that the government sees this as a superior alternative to their own currency.“
As of this writing, the cryptocurrency market cap is around $1.1 billion. Meanwhile the price of the digital token is on the rise, hitting the $60,000 mark on Monday.