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While the declarations and position documents of most central banks were generally skeptical about cryptocurrencies, timing could change.
At the beginning of this year, the Federal Reserve of Saint Louis published a study that correlates the positive effects of cryptocurrencies for the protection of privacy.
Even with the precipitous decline in the value of Bitcoin, Ethereum and other currencies, the author of the Federal Reserve emphasized the new competitive offer of these currencies created just for the way they work and, consequently, because they are here to stay.
And the antitrust authorities should accept cryptocurrencies and blockchain technologies for the same reason.
Fact: crypto-currencies are good for privacy protection (legitimate)
In the July article by Federal Reserve research colleague Charles M. Kahn, cryptocurrencies were considered an example of privacy protection that even central banks can not provide to customers.
Kahn also stressed that "privacy in payments is desired not only for illegal transactions, but also for the protection against negligence or negligence on the part of the counterparts or the provider of the payment system itself".
The act of payment commits the responsibility of the person doing it. As a result, the parties insert numerous contractual clauses to limit their liability. This creates a real problem due to the fact that some "parts of the transaction are no longer able to support the lawyers' fees needed to keep the agreement." Smart contracts can solve this problem by automating conflict resolution, but for anyone who does not do it. To access it, crypto-currencies solve the problem differently. They allow you to make a transaction without revealing your identity.
Above all, crypto-currencies are a reaction to the fears of invasion of privacy by governments or big companies, according to Kahn. And indeed, following the revelations of Cambridge Analytica and false news, we hear more and more opinions express concerns. The general data protection regulation is designed to protect private citizens, but in practice "more and more people will turn to payment technologies for the protection of privacy in specific transactions". In this regard, cryptocurrencies provide an alternative solution that competes directly with what the market currently offers.
Consequence: blockchain is good for competitors and consumers
In fact, cryptocurrencies may be the last of many blockchain applications. The dissemination of data between a decentralized network, independently verified by some or all of the network's stakeholders, is precisely the aspect of the technology that provides privacy protection and competes with applications outside the blockchain by offering a different kind of service.
The St. Louis Fed study emphasizes that "because privacy needs are different in type and degree, we should expect a variety of platforms to emerge for specific purposes, and we should expect continued competition between traditional suppliers and start-ups."
And how can we not love the variety? In an era where antitrust authorities are increasingly concerned about consumer privacy, crypto-currencies (and more generally blockchains) offer much more effective protection than the antitrust and / or combined GDPR law.
These agencies should be happy, but they do not say a word about it. That silence could lead to imperfect judgments, because ignoring the speed of blockchain development – and its increasingly varied use – leads to misjudgment of the true nature of the competitive field.
And in fact, because they ignore the existence of blockchain (applications), they tend to engage in more and more procedures where privacy is seen as an antitrust concern (see what is happening in Germany). But blockchain actually provides an answer to this problem; consequently it can not be said that the market is failing. And without a market failure, the intervention of antitrust agencies is not legitimate.
The roles of nutrition and antitrust agencies may change
This new privacy offer of blockchain technologies should also lead to changes in the role of the agencies. As the Fed study pointed out:
"The future of central banks and paying authorities is no longer in the provision of privacy, but in the regulation of privacy, in maintaining the ring as different payment platforms offer appropriate solutions to different niches with different mix of expenses and security , and with attention to the different parts of the public's request for privacy. "
Some constituencies could criticize the growing role of central banks in enforcing and guaranteeing online privacy, but those banks would be even more pressured if they took care of the task themselves instead of trying to sell it to the network.
The same applies to the antitrust authorities. It is not up to them to judge what the business model of digital companies should be and what degree of privacy protection they should offer. Their role is to ensure that there are alternatives, in this case, that the blockchain can be implemented without uninformed regulation to slow it down.
Perhaps antitrust agencies should be more explicit about the benefits of cryptocurrencies and blockchain and advise governments not to prevent them.
After all, if even a Fed is now pro-crypto-currencies, antitrust regulators should jump on the bandwagon without fear. After all, blockchain creates a new alternative by offering real privacy protections, which ultimately put more power in the hands of consumers. If the antitrust agencies fail to recognize it, we will soon ask: who are they really protecting?
