As we head into Memorial Day here in the United States, when we honor all of the troops who have made the ultimate sacrifice for their country, it’s worth noting the U.S. military is infinitely more progressive than other institutions when it comes to bitcoin and cryptocurrencies.
So what does owning bitcoin have to do with the military, you ask? Some academics and think tanks are pushing the idea that owning bitcoin or other cryptocurrencies constitutes a security risk. Their theory works something like this:
- The only thing people use bitcoin for is to purchase illegal goods or launder money.
- Therefore, if you own bitcoin, you are either doing something illegal or planning on doing something illegal.
- Those illegal things that you’re doing, or are about to do, make you a security risk.
- That means you shouldn’t be handling sensitive/classified materials or possibly even be in the military.
- And in the off chance you are investing in bitcoin, that makes you too stupid to either hold a security clearance or be in the military.
I’m not kidding about this. Just read this Bloomberg story and you’ll understand how simplistic – and scary – this thinking is. Owning and investing in bitcoin is perfectly normal. It’s new. But it’s normal. New doesn’t have to equal scary – or stupid.
You want to know what else people use for nefarious transactions? Cash. You don’t see people trying to outlaw that. The same goes for diamonds and gold. Just imagine the howls of protest if those were treated the same way!
Fortunately, the U.S. military knows enough not to dive down this rabbit hole. One of the top priorities for the Pentagon is clearing a backlog of 700,000 background investigations into defense contractors. And many of these are job applicants for high-tech positions, the exact kinds of people likely to hold bitcoin.
That’s why, when a Defense Security Service (DSS) employee tried to categorize bitcoin as a “foreign” currency, triggering even more paperwork and investigation, he received immediate pushback, according to the Bloomberg story.
The DSS quickly made it public that there was no “official” position regarding bitcoin. That’s simply not a position the Pentagon can afford to take if it wants to attract the top-tier talent it needs to modernize the country’s security apparatus.
“If we’re going to say that if you’ve got a bitcoin or another digital currency account that could be a signal or shoot up a red flag for a security clearance, guess what? Those people aren’t going to sit around waiting to try to onboard for a government job,” retired Air Force general Greg Touhill told Bloomberg in an interview. “It would grow the backlog considerably, in my view,” he added.
Touhill should know. The former military officer was made the first Federal Chief Information Security Officer in 2016. He stepped down from that post in 2017.
You want to know who else understands that the military can’t be scared of new things if it wants to evolve? Defense Secretary James Mattis. Here are some of the remarks he made in a speech this year:
- “To keep pace with our times, the department will transition to a culture of performance and affordability that operates at the speed of relevance. Success does not go to the country that develops a new technology first, but rather to the one that better integrates it and more swiftly adapts its way of fighting.”
- “Our current bureaucratic processes are insufficiently responsive to the department’s needs for new equipment. We will prioritize speed of delivery, continuous adaptation and frequent modular upgrades.”
- “We must shed outdated management and acquisition practices, while adopting American industry’s best practices.”
Mattis has also made cybersecurity and cyberwarfare a major priority. Does this sound like someone who is going to let old-fashioned thinking about crypto get in the way of modernizing the U.S. military?
Mainstream acceptance of cryptocurrencies is growing. Goldman Sachs is opening a crypto desk – and it doesn’t get more mainstream than that. Fortunately the military seems to get it too. And that’s one more thing to be grateful for over this long weekend.