CAI0001

Written evidence submitted by Philip J Milton & Company Plc

Crypto-assets’ consultation/inquiry

I write as a cynic.  I believe the whole concept has been one of the most successful Ponzi schemes in human history and a brilliant corruption for marketing by the use of familiar words like ‘currency’, ‘coin’, ‘mining’, ‘asset’ and ’investment’.  This has been embellished by the anti-government, anti-establishment principle of non-traceability.

‘it’ is not regulated.  It has no substance, no unique use which cannot be substituted by something else, no real scarcity of supply in tangible terms (there are over 7,000 different types, after all). 

Even the so-called ‘stable coins’ which are meant to be backed by real assets… 

And of course the whole field is a great stomping ground for the fraudster – one-in-six fraud cases reported involve ‘cryptocurrency’ and also people pinching coins from ‘secure wallets’.  They are also the domain of the ‘untraceable’, so used by criminals for illicit reasons.

It’s not ‘investment’ nor an ‘asset’. It’s not a ‘currency’ and never can be.  Government should grasp the nettle and state this.

These things are not regulated.  That means there are no enforceable rules or protections for participants and there is still ‘nothing’ behind them when things go wrong. 

However, ‘crypto currency’ has been perhaps the most successful marketing exercise of all time, reliant only really upon the collective human emotion and enthusiasm which demands greater confidence in the concept ‘tomorrow’ to propel the price of these things ever upwards, in a religious fervour. 

Yes, they can have a purpose.  However, there is nothing ‘now’ or in the future that cannot be provided by the Dollar, Euro, Sterling, Yen, etc but these are real and backed by governments which have tax-raising powers to bail them out of trouble, even if on the never-never. 

There is nothing there at the end of the day and nothing anyone needs that cannot be provided by regulated alternatives which have existed for a very long time.

Is this really the world’s biggest ever get-rich-quick chain letter which one day will come to a simple and snarling halt…? 

So, legitimate usage and trading or speculation should be banned.

Meantime, world powers should regulate the activities of those promoting the vehicles – the whole ‘chain’.  This is not only to provide protection to those who engage but also to satisfy necessary Money Laundering regulations.

If they really must, forward-looking governments could perhaps consider the creation of legitimate, regulated technical/computer assets if they really believe they are necessary, even backed by their own currency as surety regardless of what may go awry.  However, I challenge whether these are actually necessary as the money transmission systems extant are more than adequate and as blockchain technology develops, then these can be engaged there anyway.

Personally, I have frowned-upon any regulated investment firm which has ‘invested’ in crypto and I see it as a flawed judgment of their general capabilities, whether they have ‘profited’ or not.

I do not suggest however that ‘distributed ledger technology’ and ‘blockchain’ should be confused in the same space as ‘crypto’.  It would be just as easy to use a regulated, 100% security-backed ‘Sterling-bit crypto’ (or ‘Gold-bit crypto’), in theory, with full regulatory control and traceability for these purposes even if simple present systems cannot be adapted anyway.

Finally, the mania has especially attracted a younger-age set which perceives it will fulfil all their worldly dreams and many have participated on borrowed funds.  Hence the actual ‘cost’ to Society may well manifest itself down the road and well-after regulatory bodies should have already acted in concert to ban the promotion of these things long before the damage had been done.  That is already a failing of government/regulatory bodies somewhat shy of wanting to appear to be negative about something sold as being ‘exciting new technology necessary for the future’ – which it isn’t.

August 2022