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| Jack Dorsey warns of cryptocurrencies |
(Jack Dorsey) Twitter CEO Jack Dorsey has warned Square of a proposed new rule that would govern cryptocurrencies.
Dorsey noted in a message posted on the company's website that the base had harmed Square Financial Services.
In October of this year, Square bought $ 50 million worth of Bitcoin, and the company also made a huge investment in the cryptocurrency ecosystem, so Square has a lot of interest in this area.
Jack Dorsey writes: Regulations create unnecessary friction and inappropriate incentives for cryptocurrency clients and can cause regulators to avoid cryptocurrency transactions.
According to FinCEN regulations, financial institutions like Square are required to collect personal data from all parties involved in cryptocurrency transactions.
However, the main recommendation is for financial institutions to record the names and physical addresses of both parties in all major transactions.
The regulation aims to help prevent some illegal uses of cryptocurrencies such as drug trafficking, money laundering, and international terrorism financing.
Dorsey's main complaint is that doing so could create unnecessary friction between cryptocurrency users and financial institutions, which could lead to inappropriate incentives.
If the regulation goes into effect, Square will also need to collect unreliable data about people who didn't sign up for the service or who didn't sign up for the company as customers.
Dorsey, like other privacy advocates, argues the requests are illegal, especially given the openness of blockchain technology.
Dorsey believes that regulation could lead to clients using wallets or services outside the United States and transferring assets to them.
This weakens the effectiveness of financial crime networks in the world of cryptocurrency trading.
Additionally, when individuals need to provide private information to the bank in order to complete a transaction, they avoid using the bank, which is what the CEO calls a weak incentive.
Jack Dorsey writes that regulations hinder innovation because information gathering and reporting requirements deny U.S. companies the opportunity to compete on an equal footing and make the cryptocurrency a tool for development. Economically.
The letter is part of the short billing hold period because the standard comment period for such guidelines is 60 days, but the comment period for this proposal is only 15 days.
The US Treasury said the short duration of the suspension was due to significant national security needs, but did not provide any examples.