President of the Open Dialogue Foundation Lyudmyla Kozlovska participated in the largest and most influential event dedicated to Bitcoin in Europe — BTC Prague 2023, which was held in June in the Czech capital. On the first day of the conference, 8 June 2023, she spoke on the panel ‘Regulations Are Not The Solution‘, which also featured Jan Procházka, attorney at law and partner at Deloitte Legal, and Giacomo Zucco, Bitcoin entrepreneur and consultant. The panel was moderated by journalist and podcaster Bill Wirtz.
At the beginning of the discussion, there was a consensus that the regulation of Bitcoin and the cryptocurrency environment may have its bright and dark sides and will largely depend on bitcoiners’ communication with regulators.
Jan Procházka assessed that, in his experience, in the current situation, the aforementioned communication leaves much to be desired and that the level of education of regulators about Bitcoin is disappointingly low, which may create a false and temporary sense of security among bitcoiners.
Giacomo Zucco also believes that the strategy of relying on a lack of control is unsustainable in the long term. In the past, for example, it was possible to deceive regulators with information about the total transparency of the Bitcoin network, which may no longer work today. On the other hand, a complex space of other cryptocurrencies has emerged around Bitcoin over time, which, for a change, is distracting regulators from Bitcoin. But in the end, he says, “regulators and Bitcoin players will face revealed interests on both sides, and it remains to be seen whether Bitcoin is strong enough not to succumb to regulatory pressure”.
To answer the question of whether regulation is the solution or not, Lyudmyla Kozlovska tried to point out how over-regulation can make life difficult, especially for NGOs defending human rights, which, with the help of Bitcoin, can provide humanitarian aid while being financially excluded. In particular, she pointed out that regulations can be abused, especially by authoritarian regimes that are quite cynical in interpreting AML laws as an excuse to persecute activists. “The right way forward is for bitcoiners and civil society to work together closely to educate regulators so that this sector around the world can be brought within a clear, open and consistent legal framework as soon as possible,” said the ODF President.
Giacomo Zucco then presented an argument highlighting the contradiction between one of Bitcoin’s primary long-term goals – limiting the ability of governments to use inflation as a means by which to exercise power and fund their own agendas – and the interests of politicians, particularly in authoritarian countries where their careers are built precisely on control, censorship, surveillance and high inflation. While he finds direct attempts to regulate Bitcoin absurd, he believes that, precisely in order to defend the power of states and the position of politicians, an intensification of negative regulatory pressures will be inevitable. But the sooner these pressures emerge, the better for Bitcoin. Indeed, getting used to operating comfortably within regulated institutions might slow the development of the resilience of Bitcoin tools and the network as a whole, and lead to greater vulnerability in the future, when strict regulation might finally arrive and surprise bitcoiners.
“With the regulations at hand, we have at least some possibilities to influence the situation. But if they are being used to destroy the Bitcoin community, it shouldn’t be that way. That’s why I encourage people to talk to regulators to create a regulatory framework that doesn’t allow them to destroy themselves,” Lyudmyla Kozlovska stressed.
We encourage you to watch the entire panel discussion:
Read also:
- Why should human rights defenders be protected from AML/CFT abuses by authoritarian authorities? (December 11, 2023)
- “AML/CFT regulations are an open door for abuse” – Lyudmyla Kozlovska at the FATF Global Conference (September 29, 2023)
- “Bitcoin as a tool for financial freedom” — Lyudmyla Kozlovska at Plan ₿ Forum 2022 (October 22, 2022)
