Blockchain analyst firm Chainalysis has revealed that there has been tremendous growth by government agencies around the world in the use of blockchain, Bitcoin and other cryptocurrencies.
This growth was driven by "increased demand for investigative blockchain technology from public sector agencies".
The objective of these agencies with the investment in blockchain is to suppress the illicit use of Bitcoin and crypto.
Crypto assets are the future of finance
Chief executive Michael Gronager said companies like Chainalysis would help the crypto industry to thrive. To do this, they need to work with government law enforcement and regulatory authorities.
“There is a lot of optimism about how the public sector will help the private sector to grow. The government is a big part of the growth of what we are doing and will be in the coming years. Every time we win contracts on the government side, we help the private side to grow too, ”Gronager told Forbes.
In addition, the executive pointed out that Bitcoin and cryptocurrencies are the “future of finance” and are here to stay.
This is because, according to him, there is a “macro trend” that points out that crypto assets will become more reliable.
On the popularization of decentralized finance (DeFi), Gronager understands that this is the latest evolution of the cryptocurrency market. In that sense, he hopes the blockchain will help to create “a better system than the one before”.
End of Monero?
As Gronager noted, government interest in crypto includes a recent contract between Chainalysis and the United States Revenue Service (IRS).
The company recently partnered with the IRS to track the privacy cryptocurrency Monero.
For the executive, privacy tokens like Monero and Zcash, which are more difficult to track, do not have enough capacity to succeed.
“If you look at your use cases, which include organizations like crime syndicates, you need liquidity and adoption and a lot of people to use them. This works for Bitcoin as it has liquidity. Monero and zcash are niche purposes that may not be used for large-scale criminal activities. There will be privacy coins and privacy features, but they are niche products. In the long run, it is not something to worry about. ”
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