Cryptocurrencies are standing in the way of authorities catching “bad guys” who are using payment systems for nefarious purposes, a Bank of America official said Thursday.
Addressing a key criticism of bitcoin and its growing list of competitors, Cathy Bessant, BofA’s chief technical officer, said it’s important to differentiate the two major uses of digital currencies.
“As a payment system, I think it’s troubling, because the foundation of the banking system is on the transparency between the sender and the receiver, and cryptocurrency is designed to be nothing of the sort. In fact [it’s] designed to be not transparent,” Bessant said on CNBC’s “Squawk Box.”
That makes it more difficult to police business transactions in cyberspace.
“The way we sort of quote-unquote catch bad guys is by being transparent in the financial moment of money,” she said, speaking from CNBC’s Capital Exchange breakfast series in Washington, D.C. “Cryptos is the antithesis of that.”
On the other hand, BofA’s customers are free to choose to invest in bitcoin if they so wish. The space has been highly volatile, with bitcoin in particular soaring to nearly $20,000 in 2017 before falling drastically. On Thursday morning, it was at $9,340.
One thing they can’t do, though, is use a Bank of America credit cards to speculate in the crypto world.
“Just like we don’t allow stocks to be purchased on our credit cards, we’re not going to allow cryptos or other currencies to be purchased on our credit cards,” Bessant said.
Broadly speaking, Bessant said bank security is improving.
“I do actually think we’re in a better position every day,” she said. “Awareness is higher, the sophistication of our defense and detection efforts are growing every day. There are more players in the mix with a lot of expertise, and the threat environment is beginning to show patterns that make prediction and even automated prediction something we can do every day. So I do believe we’re in a better place.”
However, she said the perception of some data thieves as modern-day Robin Hoods poses a problem.
Using the good guy-bad guy analogy again, she said during a chat with CNBC’s Kayla Tausche that the relationship is clear with someone robbing a bank, but less so with someone stealing data.
“Often times the hacker or the person who causes the leak and steals the data are considered heroic,” Bessant said. “We put Julian Assange on the cover of a magazine and call him person of the year, and yet WikiLeaks is in the business of stealing data.”
Source: Tech CNBC
Cryptocurrencies as a payment system are 'troubling," Bank of America tech officer says