The Case For A Digital Dollar
There is a realistic possibility that the US dollar could be threatened by the advent of digital currencies, according to former CFTC chairman Christopher Giancarlo.
Venezuela has already launched a blockchain-based petro token to evade sanctions and rumors are rife that China is already planning to launch a crypto-version of Renminbi. We have previously covered Iran’s efforts at CBDCs here
as well as this piece on how CBDCs could be systematically important.
A digital dollar could be the solution to stave off pressures from a digital-yuan or digital tokens backed by gold.
A government-sanctioned blockchain protocol, created and maintained by an independent nongovernmental group but administered by banks and other trusted payment organizations could be one approach. Cash brought into the system would be exchanged for digital U.S. dollars on a blockchain, with the cash lodged in special escrow accounts maintained by the Federal Reserve.
The launch of a digital dollar can however cut both ways for bitcoin and cryptocurrencies. It can be a sign that legitimizes the perceived invaluable benefits of blockchain technology and bitcoin. On the other hand, the US could decide to outlaw all other digital non-sovereign currencies. This would be short sighted, as the infra for trading, lending, staking, storing etc for digital currencies is best left to the private sector.
Chainalysis Helps DoJ Shut Down A Child Pornography Site
Chainalysis played a pivotal role in shutting down the world’s largest pornography site. Chainalysis’ blockchain analytical tools helped DoJ investigators identify the perpetrators by following the trail of blockchain transactions linking the website to various centralized exchanges.
Based on information provided by Chainalysis, investigators reached out to centralized exchanges asking for KYC’ed information pertaining to the suspected accounts. When law enforcement shut down the site, they seized over 8 terabytes of child pornography, making it one of the largest siezures of its kind. The site had 1.3 million Bitcoin addresses registered. Between 2015 and 2018, the site received nearly $353,000 worth of Bitcoin across thousands of individual transactions.
Interestingly, privacy-focused digital currency XMR has been on the rise since this news broke out, perhaps in response to the possibility of complete deanonymization with bitcoin.