As bitcoin continues to eat away at the legacy financial system, the pillars of this system are making their stand and will do anything they can to stop bitcoin and the cryptocurrency sector in their tracks.
Coin Bureau has a YouTube channel with 2.09 million subscribers. It analyses all things cryptocurrency and also the existing financial system. Much of the following information comes from a recent video.
Bank for International Settlements
The BIS is often dubbed the central bank of central banks, which gives an idea of just how powerful this organisation is. It is owned by the 63 central banks that comprise its membership.
It’s technically the oldest financial institution given that it came into being in 1930. It was supposed to be disbanded in 1944 as part of the Bretton Woods Conference and the establishment of the IMF and World Bank.
Currently, one of the most important roles for the BIS is to help its central bank members to develop their CBDCs (central bank digital currencies), which can give these banks the power to decide what you can buy, when you can buy it, where you can buy it, how much money you can spend, and even the amount of money you are allowed to save.
The CBDCs allow this because of the fact that they will be programmed, allowing the central bank to have absolute control.
The BIS is utterly against cryptocurrencies, probably because these private digital assets totally undermine what the central banks are doing with their CBDCs.
Also given that the BIS has the most incredible influence and power in the existing financial system, it can use this to leverage pressure on any countries that may be thinking to opt out of the system.
Another financial organisation that is very much of the same mind as the BIS, is the FATF (Financial Action Task Force). The membership of this organisation consists of 40 countries, and dozens of other financial institutions.
The FATF was initially founded in order to combat money laundering, but now its mandate is extremely wide and encompasses anything that it perceives might have a negative effect on the global financial system.
How it operates is that it issues ‘recommendations’ that its member countries should implement into their financial laws. One such recommendation was the fairly infamous travel rule that requires institutions to collect detailed information on anyone who sends or receives more than a certain amount of money, which is generally around $1000.
Even though the FATF only gives ‘recommendations’, if there are countries that do not comply, they can find themselves on the FATF blacklist, making it extremely difficult for a country to do business globally.
As to who actually writes the recommendations that come out of the FATF, it’s not clear at all. All the officials are unelected and all the decisions that are made take place behind closed doors.
Interestingly, by European law, the FATF officials are exempt from paying taxes, they cannot be arrested or tried for any crime, and they do not have to comply with any pandemic border restrictions.
The FATF has strong ties with the US Treasury Department, and 2 of the 3 authors of the recent FATF recommendations on cryptocurrencies came from the treasury. Therefore, the US very much has a hand in what the FATF says.
This could also go a long way to explaining how the US is not on any FATF blacklists, even though at least 40% of all global money laundering takes place on its shores.
As for cryptocurrencies, the FATF is seeking to ban all peer-to-peer transactions, and also to do the same with any privacy-related cryptocurrencies. There is therefore a race for enough cryptocurrency adoption to take place which would make it impossible for the FATF to get certain country’s politicians to change direction.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.