Cryptocurrency presents new challenges and opportunities for local authorities

Cryptocurrency has ushered in a new way for consumers and businesses to transfer value. That’s presenting new challenges — but also new opportunities — for state and local governments and law enforcement agencies, according to Kat Faley, director of state and local government at Chainalysis, a blockchain data and software service provider.

“A lot of people think about crypto as this digital platform, which is certainly true. But we also know that there are almost 35,000 Bitcoin ATMs located in grocery stores and gas stations all across the United States—something that these agencies need to be staying ahead of,” she says in a new StateScoop podcast underwritten by Chainalysis.

She cites several reasons state and local authorities need to pay greater attention to the evolution of cryptocurrency in their jurisdictions. The first is that the global cryptocurrency transaction volume reached all-time highs last year of about $16 trillion dollars. That has set off a rising tide of potential consumer and business opportunities. Cities such as Miami and New York are attempting to attract new businesses by supporting the exchange of cryptocurrency, she explains.

It’s also leading to a rising tide of crime and consumer and business fraud, Faley says.

She highlights, however, how blockchain data — and the underlying public ledgers of recorded transaction data — can, with the right analytic tools and training, make it easier for state and local authorities to investigate transactions that traditional currency exchanges can’t provide. But officials have been slow to recognize the growing impact of cryptocurrency at the local level, she says.

“A lot of people have access to cryptocurrency in a way that maybe governments aren’t thinking about. And for that reason, it really is something that these agencies need to be staying ahead of,” she says.

Listen to the full podcast conversation on StateScoop.com. And hear more of our latest IT coverage across the state and local government technology community by subscribing to StateScoop’s “Priorities Podcast” on Apple Podcasts, Google Podcasts, Soundcloud, Spotify and Stitcher. New episodes are released every Thursday.

This podcast was produced by Scoop News Group for StateScoop and underwritten by Chainalysis. Learn more about how Chainalysis is helping public sector organizations stay ahead of the cryptocurrency evolution.