Department of Defense to Investigate Bitcoin's Terrorism Potential

An office within the US Department of Defense is conducting a study into bitcoin and other technologies as a potential terrorist threat, according to news reports.

The move is part of the Combatting Terrorism Technical Support Office (CTTSO) programme aimed to assist the military in understanding if and how various new technologies might be used to threaten US national security.

The news first appeared on investment consultant Bruce Fenton's blog on Friday, with a link to CTTSO's request for vendors to apply as information sources.

Before bitcoin fans get too alarmed, however, the CTTSO's list of technology keywords is over 250 lines long and includes Android, Motorola, social media and virtual reality.

Users on reddit mocked the idea, suggesting myriad other things that could be facilitating terrorist operations. They included food, shoes, US dollars and even the Department of Defense itself.

Bitcoin as a terrorist aid is a familiar trope in regulatory circles by now, to the point where it is mentioned almost as casually as 'Silk Road' in reports wishing to highlight digital currency's downsides.

The idea of an instantaneous, almost-anonymous and difficult-to-trace payment network is bound to get attention from any government that uses payment surveillance as a crime-fighting tool.

The strict KYC and AML (know your customer and anti-money laundering) rules governing the world's financial institutions, and attempts to stamp out other near-anonymous transfer systems such as hawala, are proof that comprehensive international payment tracking is something the authorities value highly.

The Department of Defense is also not the first US government branch to take an interest in how terrorists might use digital currencies. The Department of the Treasury has conducted its own investigations into bitcoin, but downplayed any threat both in November and March.

Bitcoin, it said, was too volatile in value and limited in utility to be of use to terrorists, who generally preferred 'real' money anyway.

Since these factors are also a barrier to widespread bitcoin adoption in the mainstream economy, governments will likely be watching digital currency developments for some time to come.

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