Decoded: Technology Law Insights, Volume 2, Issue 15

Spilman Thomas & Battle, PLLC

Bye-Bye, Bitcoin: It's Time to Ban Cryptocurrencies -

"International banking officials say cryptocurrencies such as bitcoin are speculative assets, not sustainable, usable money."

Why this is important: This opinion piece argues for banning cryptocurrencies so a Central Bank Digital Currency ("CBDC"), that already is underway in the U.S., can be implemented. It notes that 81 countries are in some stage of developing a CBDC and argues that countries should work together to attempt to ban cryptocurrencies. Its reasons for calling for the death of these currencies is three-fold. First, it argues they enable ransomware attacks. This argument crops up throughout many criticisms of the currencies and ignores the fact that ransomware attacks existed long before cryptocurrencies did. There's no certainty that banning these currencies (even if it could be accomplished) would stop ransomware attacks any more than banning cash would stop thefts. Second, the article states there are 8,000 cryptocurrencies and "the proliferation of do-it-yourself digital currencies is a serious and bad omen for global financial stability." The majority of cryptocurrencies aren't large enough to be a serious or bad omen and don't appear to be on the verge of toppling global financial stability anytime soon. Third, the article repeats the oft cited argument that the "data mining to produce bitcoin is a serious environmental hazard, using huge amounts of electricity by rows and rows of computers." This argument ignores the other 7,999 cryptocurrencies it says exists. It likewise ignores those currencies that rely on a validation method other than proof-of-work and the efforts currently underway to develop bitcoin mining powered by solar and other renewable energies. At bottom, this article isn't the first to level these criticisms against cryptocurrencies, and the detractors and supporters alike have been debating these points with passion for a while.

Please see full Newsletter below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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