EU's change in stance on Bitcoin won't hurt ISIL

    The recent terrorist attacks in Paris have caused a great stir in the international community, especially in Europe and the United States. Soon after the attacks, multiple reports pointed to the use of Bitcoin to finance the terrorists. Governments, which have never taken anonymous hackers very seriously, are suddenly considering their views on Bitcoin. Now, based on these unconfirmed reports, Europe is planning to reconsider its stance on Bitcoin and other digital currencies.

    So far, neither the EU nor the US have succeeded in thwarting the spread of ISIL, an extremist militant group. It also claims that the NATO ally created the terrorist group by destabilizing the region in the name of democracy in the first place. Whether it is a conspiracy theory or not, they still seem to dislike that they are currently taking steps to crack down on digital currencies, rather than being clueless.

    A hacktivist group working against ISIL has confirmed that it has found more than 9,000 bitcoins, worth about $3 million, in bitcoin wallets believed to be owned by the terrorist group. However, no one can say what actual fiat currency ISIL currently controls or has earned from the free trade of oil and other resources. Unlike Bitcoin, cash reserves are virtually untraceable, and the amount of currencies such as the US dollar in circulation in areas controlled by ISIL is definitely much greater than Bitcoin.

    For those who understand the world economy, Bitcoin accounts for less than one percent of the world economy, and hundreds of billions of dollars in cash are incomprehensible. Even the recent risk assessment report on money laundering and terrorist financing released by the UK Treasury confirmed that when it comes to illegal use of funds, traditional monetary systems such as cash and bank transfers have greater risks than Bitcoin.

    The same sentiment is shared by Leonid Bershidsky, a writer, editor and columnist whose views on Bitcoin and terrorism were recently published on Bloomberg View. Governments and intelligence agencies have a better chance of tracking terrorists with Bitcoin than with cash clues, and Bitcoin has a smaller market share in the world economy than fiat currencies, so it would be better for the EU to tighten the flow of funds in the form of Euros or dollars, rather than Bitcoin.

    He also believes that if ISIL did use Bitcoin to finance their activities, there would be a lot of transactions taking place on the Bitcoin network, leading to a significant increase in the value of Bitcoin. In addition, by placing strict restrictions on Bitcoin, the EU or any other country would hinder innovation and progress in the fintech sector, which would cost the country's economy billions of dollars.