Home Technology Regulation Greg Medcraft: Bitcoin doesn’t have a future

Greg Medcraft: Bitcoin doesn’t have a future

A former ASIC chairman has predicted a grim future for bitcoin unless the original cryptocurrency changes the way it operates.

At the Australian Blockchain Conference earlier this week, Greg Medcraft, currently Director – Directorate for Financial and Enterprise Affairs, OECD and previously Chairman of ASIC, attempted to outline many of the risks associated with a Blockchain environment, and then positioned Bitcoin in that framework.

Medcraft initially outlined four broad risk categories that are specifically associated with innovation in blockchain:

  • “Relating to the ownership and use of data stored on the distributed ledger.  I think ‘privacy’ is going to be a big, big topic in the next two or three years.”
  • “Whether it be in areas such as ‘identity’ or ‘authentication’ or ‘cyber security’. “
  • Consumer and investor protection issues. “Whether it be in governance of the entities or disclosure – many of the fundamental policies which will apply in a digital world in terms of competition, interoperability – you can’t have one particular system that is not interoperable; that creates competition issues, which then creates issues for consumers and investors.  Then also we’ve got to think about market integrity – we need a transparent market, that’s the best protection.  Also, Education – education is really important for people who are going to try to use reliable technologies.”
  • Transferability and traceability. “In terms of regulators, tax authorities and law enforcement agencies.”

“I think for these reasons, Bitcoin doesn’t have much of a future, unless it changes – a lot.”

In addition, Medcraft noted that in 2016 and 2017, there had been around 900 initial coin offerings, nearly half of which had failed, giving some weight to the risks outlined above. 

He also observed that there was still a “wild west” mentality in much of the blockchain environment and there is a need for the “rule of law” to come into play in order to permit monetary applications to become more mainstream.

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