×

Bank system better at tracking illegal activity than digital currencies like bitcoin, says BofA CEO Moynihan

  • Bank of America CEO Brian Moynihan says digital currencies like bitcoin raise worries about how their anonymous nature limits authorities' ability to track illegal use of funds.
  • Speaking on CNBC's "Fast Money Halftime Report," Moynihan also says the banking system today tracks money flows well and authorities can use that data to find those involved with illegal activity.
  • BlackRock CEO Larry Fink earlier this month called bitcoin an "index of money laundering."

The head of a major U.S. bank said Thursday that the anonymous nature of digital currencies like bitcoin is what authorities should be most concerned about, and that banks offer more security.

Bank of America CEO Brian Moynihan pointed out that while major financial institutions send trillions of dollars digitally all the time, cryptocurrencies don't clearly disclose who is involved in a transaction.

"There ought to be a hard look at the policy of anonymous currencies, because the ability to track information of money flowing is one we use seriously against terrorism and as [a tool] against improper, illegal behavior," Moynihan said on CNBC's "Fast Money Halftime Report."

“What our banking system does for this country and the world is we track all this money and the data can be found and then you can do things to find people," he said.

Many people associate bitcoin with illegal activity since it was a major currency for online marketplaces that sold illicit drugs and supported money laundering.

BlackRock CEO Larry Fink earlier this month called bitcoin an "index of money laundering."

Bitcoin transactions are encrypted and recorded in a permanent, online ledger called the blockchain. Users identify themselves with a public address of numbers and letters in order to receive payments.

However, if a user stays with the same public address, intelligence agencies can potentially connect fund flows with an individual. A U.S. Homeland Security official and cryptocurrency analysts told CNBC in August that law enforcement is getting better at tracking down illegal activity in bitcoin, causing some to turn to more encrypted digital currencies.