BIS Approved Wallets Coming Soon...

The Bank of International Settlements (BIS) is back with a bang folks! As you know they never disappoint with their reports whenever they are lamenting about how Bitcoin is a danger “to the financial stability of the global economy”, which is statist speak for “Bitcoin is a problem for our centralized, top-down, theft-driven monetary system. In their latest bulletin titled, “An approach to AML compliance for cryptoassets” they propose the creation of a grading system for each sat and/or stablecoin based on transaction history. In other words if a coin has passed through a “suspicious wallet” it is tainted due to its possible link to illicit financial activities like money laundering, terrorist financing bla bla bla. I’m sure you can already see where this is going.

For those obsessed with maintaining an iron grip on the financial system or being the humble servants of the central banks, this seems like a common sense proposal but it's really the foundation of a global monetary social credit system. A programmable surveillance layer that destroys an essential property of money: fungibility.

The Death of Fungible Money

As noted earlier, the BIS’s central proposal is the creation of an AML compliance score that attaches to every coin based on its provenance. Coins that have passed through “allow-listed” wallets receive a high score; coins that have touched “deny-listed” addresses get a low score or are outright blocked from being converted to fiat. Money derives its purchasing power from its previous use as a commodity. Bitcoin perfectly satisfies this requirement as it began as a “curiosity project” with no monetary value, gained value through voluntary adoption by early users, and gradually became accepted as a medium of exchange.

The BIS's approach threatens to undermine this natural market process by artificially creating different classes of bitcoin based on arbitrary government classifications. Furthermore, sound money must be interchangeable, or it ceases to be money and therein lies the BIS's fundamental error; which is the treatment of money as if it were a government license rather than a market good.

By introducing a purity score, the BIS is attempting to turn money into a graded voucher system, where the market value of your funds depends on political approval.In other words, this proposed "AML compliance score" system transforms each satoshi from a bearer instrument, like gold coins that carry no history of previous owners, into a tracked and surveilled digital asset that remembers every transaction.

Dissecting the BIS Claims: A Point-by-Point Demolition

Let’s unpack this crazy bulletin and see what else is being proposed by the “Tower of Basel”.

BIS Claim #1:The Decentralization Problem

“Existing AML approaches relying on trusted intermediaries have limited effectiveness on permissionless public blockchains. Blockchain’s public transaction history could be leveraged to create an AML compliance score for coins or balances.This score would be used at off-ramps to prevent inflows of illicit funds, reinforcing a “duty of care” among crypto participants”

The BIS admits that Bitcoin’s decentralization renders their traditional surveillance choke points ineffective and sees this not as a feature of freedom, but as a flaw to be “corrected”. The “duty of care” is simply conscription into a global financial Stasi. In practice, this means every wallet user becomes an unpaid compliance officer, responsible for checking the purity of funds before accepting them. This destroys the spontaneous order of commerce and replaces it with a culture of suspicion, fear, and constant verification. Peer-to-peer exchange will wither under the threat of taint, concentrating activity in fully KYC’ed walled gardens, the very antithesis of what Bitcoin was built for.

BIS Claim #2:The Crime Statistics Shell Game

“Cryptoassets are integrating with the mainstream financial system. Stablecoins now account for 63% of illicit transactions. The integrity of payment systems must be protected against money laundering.”

The numbers they cite come from blockchain analytics companies like Chainlysis whose “illicit activity” definitions are politically malleable, highly questionable and often inflated. By focusing on crypto’s alleged role in crime, they ignore the overwhelming reality: the traditional banking system launders magnitudes more illicit funds than crypto ever has!! HSBC, Danske Bank, and others have proven that AML laws are selectively enforced. This is not about crime reduction; it’s about reasserting control over a monetary network that operates outside their gates.

Let's put the BIS's concerns in perspective. They cite $51.3 billion in cryptocurrency allegedly used for illicit purposes in 2024. Meanwhile, central banks created trillions of dollars out of thin air during the COVID-19 response, stealing purchasing power from every holder of their currencies. The Federal Reserve's balance sheet alone expanded by over $4 trillion between 2020 and 2021, monetary theft on a scale that dwarfs any alleged cryptocurrency criminality. Yet the BIS shows no concern for this systematic plunder of savers and wage earners.

BIS Claim #3: The Intermediary Dependency Delusion

“In fiat systems, AML relies on regulated intermediaries like banks who perform KYC at account opening and transaction execution. This model breaks down on permissionless blockchains where there is no single accountable intermediary.”

Uh-duh! That's exactly the point. Permissionless systems exist precisely to remove the political chokepoints that banks represent. Bitcoin’s design ensures that no one can arbitrarily block, freeze, or reverse transactions, which is a monetary shield against tyranny. From the outset, the BIS frames permissionless blockchains as a “problem” to be tamed because they remove trusted intermediaries. That’s the tell. The BIS frames this as a flaw because it reduces their ability to dictate who may participate in the economy.

BIS Claim #4:The Jurisdictional Weapon

“Use blockchain data to assign a score to each coin or wallet based on association with allow- or deny-listed addresses. Authorities can set thresholds to block or allow off-ramp transactions. This could incorporate local laws such as FX regulations.”

This would institutionalize non-fungible money. A satoshi from a “dirty” source becomes less valuable than one from an “approved” source, shattering one of the foundational properties of sound money. What’s even worse about all this is that tying scores to jurisdiction-specific rules enables cross-border censorship, where the most restrictive legal regime dictates what is spendable globally. Today’s “deny list” is tomorrow’s list of political dissidents. Furthermore this will greatly expand the BIS’s power as they will be the ones dictating policy on this matter. Just like old times.

BIS Claim #5:The False Choice Spectrum

“The strictest version requires all coins to have passed only through KYC-approved wallets. The weakest simply blocks coins from known illicit addresses. Intermediate approaches include time-held requirements, interaction rules, or transfer amount limits.”

This “spectrum” is a false choice; all versions violate privacy and fungibility. The “strong” approach abolishes pseudonymity entirely, effectively banning non-custodial wallets. The “weak” approach still creates a blacklist economy where economic freedom is contingent on political permission. Both push users toward centralized honeypots that are easier to surveil, hack, and control. Let’s not even start with discussing the illegitimacy of all KYC regulations

BIS Claim #6:The Surveillance Deputization

“Responsibility for preventing illicit flows should be assigned — possibly to exchanges, stablecoin issuers, banks, or individual users. The goal is to incentivize avoiding tainted coins.”

Assigning “duty of care” is just shifting the burden of state surveillance onto private actors and ultimately, onto every individual. This deputizes citizens as unpaid compliance officers and criminalizes ignorance.

BIS Claim #7:The Global Cartel Coordination

“Global coordination is essential to enforce AML compliance scoring across borders.”

This is cartel logic. International “cooperation” in monetary policy is always a euphemism for collusion against monetary competition. Bretton Woods, Basel accords, FATF; all were designed to entrench central bank dominance. Once this scoring regime is globally harmonized, opting out becomes nearly impossible without being financially blockaded.

The Hidden Agenda: Kneecapping the GENIUS Act

What's potentially more sinister lurking beneath the BIS's "AML compliance score" is an attempt to kneecap the GENIUS Act and blunt USD stablecoin rise. GENIUS just gave dollar-backed coins legal clarity, 1:1 reserve requirements, and regulatory oversight, setting them up as a mainstream U.S.-anchored payment rail at scale.

The BIS counterpunch? A scheme to tag every coin with a mutable risk score, embed that score into wallets and protocols, and force banks, merchants, and end-users to police "allow" and "deny" lists. Layer in "duty of care" liability, cross-border enforcement, and deliberate price discounts for "tainted" units, and you've transformed fungible money into a fragmented, permissioned voucher system.

The playbook is glaringly obvious: weaponize off-ramps and provenance scoring to make GENIUS-compliant USD stablecoins more expensive, less reliable, and harder to spend abroad, while steering flows toward the BIS's preferred "unified ledger" built on central bank money and tokenized deposits. With ~99% of stablecoin value already USD-denominated, any global uptake of this scoring regime would hit America's new payment rail hardest. Sold as AML hygiene, it's really an extraterritorial veto on the dollar's fastest-growing network, timed perfectly to stall momentum before it escapes the banking cartel's reach. Food for thought.

The Financial Surveillance State

Regardless of their other ulterior motives, what the BIS is proposing is nothing short of a financial surveillance state. If implemented, the BIS system would create a world where every financial transaction is permanently recorded, scored, and subject to retrospective punishment. Sounds very much like a CBDC doesn’t it?

The bulletin's authors seem to understand Bitcoin's technical properties but completely miss their purpose. Yes, Bitcoin transactions are public and traceable but this was designed to solve the double-spending problem in a decentralized system, not to enable mass surveillance.

Throughout the report, the BIS repeats the same tired line that this is about “stopping money laundering and terrorism financing.” Yet even the UN admits that 99% of money laundering goes undetected under the current AML regime, despite the surveillance dragnet imposed on billions of innocent people, not to mention the massive compliance costs.

Whenever the state controls money it always metastasizes into a tool for coercion. AML laws are the perfect Trojan horse for treating everyone like a suspect, since they shift the presumption of innocence to a presumption of guilt, turning trade into a permissioned activity overseen by the banksters.

Bitcoin was created as an alternative to the corrupt, centralized monetary system that the BIS represents. It was designed to be censorship-resistant, private, and free from central authority. The BIS proposal seeks to destroy all of these properties and transform Bitcoin into yet another tool of state control.

The Path Forward

Every bitcoin acquired without KYC is a vote against the surveillance state. Every peer-to-peer transaction is an act of civil disobedience against financial tyranny. The goal should be to minimize interaction with the legacy financial system that the BIS represents, especially given their intent to use on/off ramps as chokepoints for enforcing their tyrannical fiat system.

The time has come for online commerce to become Bitcoin-dominated. This will reduce the need for fiat conversions and ensure the ease of spending Bitcoin outside the BIS's playground.