Jack Dorsey, CEO of Twitter and Square, warned against the proposed new regulation of cryptocurrencies
Dorsey stressed that the regulation hurts Square, a financial services company, in a letter posted on the company's website.
Square bought $50 million worth of Bitcoin in October, and the company also invested heavily in the cryptocurrency ecosystem, so Square has a lot of interest in the field.
Jack Dorsey wrote: Regulations create unnecessary friction and harmful incentives for cryptocurrency clients that may cause regulators to avoid cryptocurrency transactions.
The regulation, proposed by fincen, requires financial institutions, such as Square, to collect personal information about parties involved in cryptocurrency transactions.
The most important proposal, however, is for financial institutions to collect the actual name and address of both parties in any major transaction they are involved in.
The regulation aims to help prevent some illegal uses of cryptocurrencies, such as drug trafficking, money laundering and the financing of international terrorism.
Dorsey's main complaint is that there may be unnecessary friction between cryptocurrency users and financial institutions, which may lead to harmful incentives.
If the regulations come into effect, they require Square to collect unreliable data about people who have not subscribed to the service or have participated as customers of the company.
Dorsey, along with other privacy advocates, believes the requirements represent an overreach, especially given the open nature of blockchain technology.
Dorsey argues that regulations could lead customers to use portfolios or services outside the United States and transfer assets to them.
This weakens the effectiveness of the financial crime network in relation to the world of cryptocurrency transactions.
If people have to provide private information to a bank for a transaction, they will avoid using the bank, which the CEO describes as a harmful incentive.
Jack Dorsey wrote that regulations hinder innovation, because information collection and reporting requirements deprive U.S. companies of the opportunity to compete at an equal level to enable cryptocurrency as a tool for economic empowerment.
The letter was submitted as part of the short comment period on the list, as the standard suspension period for these types of policies is 60 days, but the comment period on this proposal is only 15 days.
The Treasury Department says the short suspension period is due to important national security imperatives, but it does not provide any examples.
0 Comments