During an interview with MSNBC’s Rachel Maddow on Nov. 24, Hillary Clinton spoke about the need to regulate the cryptocurrency market. Without necessary protections, she warned, China and Russia have the power to use the likes of bitcoin and ethereum “to their advantage.”
Should we heed Clinton’s warnings? More importantly, is she right?
Considering there are now at least 6,000 cryptocurrencies in existence—many of them worthless and dangerous—Clinton certainly has a point. The world of crypto is similar to the Wild Wild West, largely lawless. Moreover, cryptocurrencies are vulnerable to serious attacks. China and Russia, it’s important to note, have some of the best hackers in the world.
Although the Chinese Communist Party (CCP) is no fan of cryptocurrencies, it’s important to ask why it’s not. Beijing views bitcoin and its brethren as a direct threat to its digital dreams. How so? Because cryptocurrencies, by design, are the antithesis of highly-centralized, fiat currencies like the U.S. dollar. As the CCP rolls out its new digital currency, the e-CNY, it seeks to become the dominant force in all things finance. This involves making sure that bitcoin never becomes the global reserve currency (which is the goal of many bitcoin proponents).
Even Sen. Rand Paul (R-Ky.) believes bitcoin could become the global reserve currency. Is he right? Probably not. But if he is, then the CCP’S digital currency will have to settle for second or third place. As you can see, bitcoin is very much a direct threat to the CCP’s financial plans.
Many Americans—around 21 million Americans, or 14 percent of the United States’ adult population, to be exact—now own cryptocurrencies. With no regulations currently in place to protect their digital assets, millions of investors are exposed to known and unknown dangers.