EU, you've missed the point, leave Bitcoin alone!

     After ISIS admitted to the Paris terrorist attack, it was not only retaliated by France, which bombed the ISIS "capital" Raqqa in northern Syria, but also countries in the G20 and APEC summits unanimously sought ways to combat terrorist attacks. However, Reuters, Bloomberg and other foreign media broke the news that the EU's plan to destroy ISIS's financial resources was to strictly control virtual currencies such as Bitcoin, which also made Bloomberg editorial writer Leonid Bershidsky say: You got the point wrong, let Bitcoin go!

The Western World’s War on Terrorism Has Bitcoin in the Reach

     Germany's Der Spiegel reported last week that the Group of Seven industrialized nations privately discussed regulation of financial technology companies at the G20 summit, including financial services such as Bitcoin that are less monitored by national security agencies, which may be used by the Islamic State to transfer funds. Although the German Ministry of Finance declined to comment, an informed source told Reuters that on the 20th, the interior and justice ministers of EU member states met in Brussels to discuss "strengthening regulation of electronic currencies, anonymous payments, prepaid cards, and precious metals such as gold" in order to block terrorists from transferring funds.

     Reuters even singled out Bitcoin, which is widely used, as the first target of EU restrictions if the bill is passed. However, the EU's efforts to combat terrorism from a financial perspective have made Bloomberg columnist Leonid Bershidsky unbearable, saying that the draft bill may have good intentions, but in fact, the Islamic State's reliance on the US dollar is likely to be greater than Bitcoin, and the relevant EU authorities may have "missed the point."

     Leonid Bershidsky pointed out that although the Islamic State is well-known for its hatred of the United States and has announced in the past that it would create its own currency to "destroy" the evil American capitalist system, in fact, the organization's profits are still highly dependent on the US dollar. For example, smuggling, selling oil, stealing and selling cultural relics in ancient monuments, and forcing people in occupied areas to "pay taxes" are also done in US dollars. In addition, ISIS also uses US dollars to purchase weapons and pay the salaries of fighters.

Compared with Bitcoin, the untraceable cash flow is the culprit

In addition, according to estimates by US intelligence agencies, the Islamic State's assets are approximately US$2 billion, which is only a fraction of the US$670 billion in circulation worldwide. However, Leonid Bershidsky believes that if ISIS uses Bitcoin to secretly transfer funds, even if it only invests millions of dollars, it is likely to cause a crazy surge in the value of Bitcoin. Such a strange phenomenon would probably be difficult to ignore.

    Leonid Bershidsky also admitted that EU officials ignored the characteristics of emerging financial technologies when considering regulating virtual currencies.

    For example, Bitcoin is not only a payment method, but also an investment commodity internationally, and it is also a high-risk investment commodity. In the past month, the fluctuation of Bitcoin against the US dollar has been much greater than the international gold price. This means that if the Islamic State uses Bitcoin to transfer funds, it may face a sharp drop in Bitcoin, and huge amounts of funds will shrink or even disappear in an instant. For ISIS, whose income has been hit hard by military movements in Europe and the United States, the risk is too high and it would rather use the "evil" US dollar.

    Taking all these factors into consideration, Bershidsky asserts that the large amount of cash that flows into the underground economy every year is probably the main source of terrorist liquidity, rather than financial technology, which emphasizes privacy and is feared by national security agencies. Leonid Bershidsky pointed out that regulating and banning electronic currencies may not help in the end to combat terrorist attacks, and called on the European Commission to show mercy and let Bitcoin go; he also bluntly pointed out that if EU officials intend to start with financial instruments in order to cut off the financial channels of terrorists, it may be more effective to ask people to stop using cash.