In recent days and weeks, U.S. Treasury Secretary Janet Yellen has been raising the alarm about what she perceives to be a rising “misuse” of cryptocurrencies, which she argues are used mainly “for illicit financing” by unsavory groups. During her confirmation hearing, Yellen provided some ominous foreshadowing, saying, “I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.” Back in December 2020, former Acting Comptroller of the Currency Brian P. Brooks warned consumers to expect more crypto regulations before the end of former President Donald Trump’s term.
Those regulations never came to pass, but Yellen’s interest in curtailing cryptocurrencies proves that the government’s fascination with the heretofore unregulated monetary system has not faded with the change in presidential administrations. Elsewhere in the world, full and partial restrictions have recently been placed on Bitcoin and crypto usage.
From partial to full bans, the record is not especially encouraging for would-be crypto prohibitionists. The historical record bears repeat, indeed virtually constant, witness to this.
Bans Beget Workarounds
In July 2020, the popular short-form video app TikTok announced that it would be suspending operations in Hong Kong following China’s imposition of a new security law on the city-state. The announcement was followed by three frantic days for the Hongkongers of the platform, until the app was eventually removed from the app store. But clever consumers quickly found workarounds to continue using TikTok. They made use of virtual private networks (VPNs), which gave Hongkongers foreign IP addresses to “trick” the app into operating within the city-state’s borders (much the same way that people circumvent the Great…