Article: Citi Bank Slaps Down Bitcoin

[hightax]

Hitler actually came before the internets.  Little known fact.

Besides, Godwin has already laid claim on all argumentum ad hitlerem.

[DeathAndTaxes]

In terms of having a serious discussion, I don't see what their problem is.  I mean, what answer would have been convincing?  And, can Citi quell world citizens' concerns about money laundering through the banking 1.0 system?  They brought up the fact that they work with the regulations of the 149 countries that they have banking licenses in.  Am I supposed to infer that if somebody says an institution complies with banking regulations, then that institution isn't used to launder money?  Why should I believe that?  I don't know yet exactly how the discussions went at the conference, but this article makes it sound like a bunch of fifth graders trying to sound like adults at a school hosted debate.

That is their game plan.

Step 1) Pretend current bank system is immune to money laundering.
Step 2) Require any competitor to be immune to money laundering.
Step 3) Point out competition can be used for money laundering and use that as an angle to attack it.

Of course is informed consumer questions step 1 the sham false apart.  Then again 99.9% of consumers aren't informed.
Epilogue:  Rampant money laundering continues on existing banking network.

[nighteyes]

Bitcoin would infringe on the banking cartel's drug money business, and they don't want the competition!
http://www.msnbc.msn.com/id/35914759/ns/business-world_business/t/wachovia-settle-drug-money-laundering-case/

Wow, this article is shocking!  Hard to believe that the shiny Wachovia HQ down the street were facilitating hundreds of millions in drug money.

http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html

.....Everybody in there knew who they were -- the tellers, everyone,” Salazar says. “The bank never came to us, though.”....
The Oropeza case gives a new, literal meaning to the term money laundering. Oropeza’s wife, Tina Marie, and daughter Paulina Marie deposited stashes of $20 bills several times a day into Bank of America accounts, Salazar says. Bank employees got to know the Oropezas by the smell of their money. “I asked the tellers what they were talking about, and they said the money had this sweet smell like Bounce, those sheets you throw into the dryer,” Salazar says. “They told me that when they opened the vault, the smell of Bounce just poured out..........search his marble-floored home in Brownsville, Robinette says. Inside, investigators found a supply of Bounce alongside the clothes dryer..

[JBDive]

How many reason do you need to not trust banks or believe a word coming out of their mouths?

http://www.nytimes.com/2010/03/18/business/18launder.html

The Wachovia Bank, a unit of Wells Fargo & Company, has agreed to pay $160 million to settle accusations that it laundered Mexican drug money.

Under the agreement, Wachovia will forfeit $110 million, representing the proceeds of illegal narcotics sales that were laundered through the bank, the United States attorney’s office in the Southern District of Florida said.

[ne1]

Watch "cocaine cowboys".  I know it was the 80s, but banks have been laundering drug money forever.

[Donald_Norman]

cypher, I'm sorry you feel that way but this was my first proper speech so I'm not sure where you saw that one. Also I don't see the video of it. I got some people saying they really liked my talk but it was a large crowd so I'm not sure how to judge it. I haven't seen the video of it so if you have please link me.

As per my answer to the money laundering question being bad, I was specifically told by someone that it was good and by another person that it was bad. The person who told me it was bad said so because I spent a couple sentences on talking about the fact that the IMF reported 3 to 5% of the banking transactions being money laundering (a big deal) and that other estimates are even higher. This however isn't a defence and perhaps I should have only said what I said after that (about bitcoin being a new technology that is here to stay and that a bad legal status would not curb the illegal activity but would take away all the possibility for social good.)

Finally, the article was incredibly wrong. No one in that room that I know of got the impression. I was told by someone who knows the author that she's "an asshole". And about 15 people that I spoke to about the article who had been there were laughing at how misrepresentative it was. People also said that the Citibank CTO was saying blowing his own horn (if that's the expression) and added nothing new but said that "modern" banks would always be a mainstay and how huge Citibank is and how systems like Paypal use Citibank as a backend for their transactions.

I'm trying to get better at speaking and if the video comes out it'll at least show that I did put a lot of time into my speech (whether it came out well or not). The guy who went before me cut into my time and having to pack Bitcoin into 5 minutes is tough. Also mentioning Bitcoin's pitfalls and saying how it's a new technology and that most of these pitfalls are analogous to those of the early internet (scammers, not end user friendly, adoption) both is and appears more genuine and will cause someone to look into bitcoin deeper and/or not be turned off when they find out about the MtGox hack and MyBitcoins and Bitomat and the Silk Road... et cetera.

[Donald_Norman]

Also regardless of how you feel about Austrian Economics it is silly to bring it up in a short segment talking to a room full of bankers. Talking about how they will have to become service and price oriented and talking about the money that can be saved using a system like bitcoin is much more appropriate and effective imho

[Bigpiggy01]

Also regardless of how you feel about Austrian Economics it is silly to bring it up in a short segment talking to a room full of bankers. Talking about how they will have to become service and price oriented and talking about the money that can be saved using a system like bitcoin is much more appropriate and effective imho

+1 This is the only sane route of "attack". Go for their short and curlies, in this case their inflated wallets

[error]

Honestly I would sort of rather the banks didn't take bitcoin seriously as a competitor until it's too late.

[Raoul Duke]

Also regardless of how you feel about Austrian Economics it is silly to bring it up in a short segment talking to a room full of bankers. Talking about how they will have to become service and price oriented and talking about the money that can be saved using a system like bitcoin is much more appropriate and effective imho

Are you trying to imply that banks should use the Bitcoin technology to process their transactions as a way to save money, or are you only talking about end-users?

[Bigpiggy01]

Are you trying to imply that banks should use the Bitcoin technology to process their transactions as a way to save money, or are you only talking about end-users?

I think this could be a really interesting alternative for a lot of smaller banks that constantly get screwed by giants like Citi. Atm they handle more than the lion's share of SWIFT transactions and other types of transfers in the US.

A bank like http://www.hvidbjergbank.dk/ (this is simply an example I'm sure the US and other places have similar local banks) would have a LOT to gain by replacing SWIFT at least partially with bitcoins. In terms of the banking world they're small potatoes but they'd be able to add an incredible service and charge a lot less by using bitcoins. ATM their situation is roughly like this:

A) Customer approaches them with a transfer to let's say a local bank in Indonesia (spouse on holiday) they charge the customer 220dkr for a transfer.

B) Transfer goes from them to a large Danish bank so they're out 75dkr.

C) Transfer goes from there to Citi or some other backbone network provider they're out another 70-100dkr.

Result: The bank has made a piddly sum in fees and the customer has had to wait for 3-4 business days for the transfer to go through.

Local bank using bitcoins:

A) Customer approaches them with a transfer to let's say a local bank in Indonesia (spouse on holiday) they charge the customer 100dkr for a transfer and give the customer something similar to a Western Union code for a pickup.

B) The recipient can pickup their $$ or local currency from the local bank after 2-3hours (possibly a bit more due to timezones and local business hours) and his/her shopping spree can continue 

Result: The bank made more fiat the customer paid lower fees and it all went faster.

Somebody like Citi should be VERY afraid of bitcoins particularly if the Eu directive in the works https://bitcointalk.org/index.php?topic=41155.0 ever comes about. It could potentially rip a large part of their business to shreds overnight.

[ThiagoCMC]

When someone says "money laundering,"  "terrorism," or "child pornography," the ability to carry on an intelligent conversation just ended.

One more... The "freedom"...

From Zeitgeist: Moving Forward interview:

...And the most insidious of them all: if you are not for the "free-market" you must be against freedom itself.

I'm a believer in freedom!

Every time you hear the word freedom being said anywhere or government interference said anywhere, it means, decoded:

"blocking maximization of turning money into more money for private money possessors."

That's it. Every other thing they'll say:

'Oh, we need more commodities for people';

'Oh, this is freedom against tyranny' and so forth every time you see it, you can decode it down to that and I think you'll find a one-to-one correlation with every time they use it.

And this, in a sense, we might call:

a Syntax. A governing syntax of understanding and of value.

So, it governs beneath their own recognition of it so they might say:

'Oh, I didn't mean that at all!'

but in fact, that's what they do.

...McMurtry

[julz]

Honestly I would sort of rather the banks didn't take bitcoin seriously as a competitor until it's too late.

This is a good point. There is much more momentum to be gained whilst still 'under the radar' as far as their perceptions of threat are concerned.

Bitcoin needs to grow to the point where some of the smaller banks want a piece of the action, rather than Bitcoin appearing as a leech wanting to piggyback-integrate with some of their existing systems.

[SlaveInDebt]

in other news Visa, MasterCard to Raise Small-Purchase Fees, Analyst Says
CCs going to start charging ~10% for small purchases with debit cards  - more merchants for Bitcoin =)

The greed machine doesn't stop does it?
That's on debit purchases (money in your bank) while you are free to not worry about such a fee should you use your credit card (money you don't actually own)
With only 2% of USD in physical cash the rest electronic those poor bankers and credit card merchants sure must be hurting.

[Tril]

When someone says "money laundering,"  "terrorism," or "child pornography," the ability to carry on an intelligent conversation just ended.

That would be three of the four horsemen of the infopocolypse:
 http://en.wikipedia.org/wiki/Four_Horsemen_of_the_Infocalypse

ok here's my anti propaganda. If you read the first word, change it to the second, to get to the real issue (opposite of what was said)!

Four Horsemen unmasked:

1. Terrorism -> War (Red Horse)
2. Money Laundering -> Poverty (Black Horse)
3. Drug Dealing -> Corruption (White Horse)
4. Child Porn -> Bureaucracy (Pale Horse)

Any time someone tries to stop the word on the left, they end up causing the word on the right.  Now reverse it:

1. Collaboration creates peace
2. Exchange increases wealth
3. Transparency reveals corruption
4. Technology obsoletes bureaucracy

Evil works to prevent people working together, restrict flow of products and ideas, build walls around organizations, and shut down new technology.  Bitcoin's specialty is attacking the black horse - bringing wealth to the poor.

[herzmeister]

Bitcoin helps with almost all of these points I'd say.

It's also a technology as well, isn't it. :->

It helps reducing bureaucracy enormously. Mining essentially automates what millions of bank employees do and replaces them.