Jakarta, CNBC Indonesia - The Bureau of the US Department of Finance, the Financial Crimes Enforcement Network (FinCEN) makes regulations regarding cryptocurrency (digital currency). Unfortunately, Square CEO Jack Dorsey is not happy with the rule. Dorsey expressed displeasure with the regulation and would harm his company as a financial service. It is known that Square invested heavily in bitcoin, including buying digital money worth US $ 50 million.
"(The regulation) will create unnecessary friction and bad incentives for cryptocurrency consumers to circumvent entity rules that are regulated in cryptocurrency transactions," Dorsey said, quoted by The Verge, Tuesday (5/1/2021).
According to him, there will be unnecessary friction between currency users and financial institutions. Eventually it can lead to adverse incentives.
These rules actually have the goal of preventing some illegal activities of cryptocurrency. For example drug trafficking, money laundering and funding for international terrorists. In the regulation, FinCEN will require financial institutions including Square to collect information about all parties involved in the transaction. Some of the data collected and deposited includes the names and addresses of these parties. Dorsey gave an example if a parent sends US $ 4,000 in bitcoin to their daughter via Square, then she will use her personal digital wallet from her own computer. That way the platform must collect personal information including his residential address. According to the Twitter founder and other privacy advocates, that rule is excessive. In addition, because of the nature of open cryptocurrency it is supported by blockchain technology. Dorsey also argued that the regulation could make US consumers use digital wallets or services outside their country. Besides that, according to him, the new rules will make the competition between US companies and global companies disappear. "The burdensome information gathering and reporting requirements deprive US companies like Square an equal competition to enable cryptocurrency as an economic empowerment tool," said Dorsey.
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