There was a quote recently from a high ranking former FBI agent that worked on money laundering where she said she wasn't really concerned about crypto making money laundering worse (trying to find the article again).
Her reasoning was: "what people need to understand is, 95% of money laundering with fiat currency already succeeds today without getting caught."
In other words, this won't really change much, it was already really hard to catch money laundering.
of course crypto would not help criminal money laundering. Bitcoin and Etherium are very traceable by design. In fact, it is often much, much easier to trace to origin of Bitcoin funds than the origin of USD funds, especially when cash was involved. There are "private" coins like Monero but they aren't getting much traction.
I actually see monero as a kind of lurking beast in bitcoin's shadow, as if it's whispering "Oh, you think bitcoin with it's completely public ledger is bad and dangerous. Why yes, it's very, very bad. Please attack people who use it and show them why they need me."
It's an interesting game that law enforcement is caught in. On the one hand, they want to demonize bitcoin because it's outside of their control. On the other hand, if they attack bitcoin users too strongly, they push people to alternatives like monero that are both outside of their control and legitimately untraceable in system.
I'm not a monero folk and think it has no real world application outside of criminal dealings.
Monero is being used as a currency though which is relevant because bitcoin used to be used as a currency too before the first bubble/speculators got a hold of it. It's critical to any conversation with claims about bitcoin being a great currency (it's not)
I am of an opinion that deflationary crypto (like Bitcoin) can not be used as currency. It should absolutely be used as a store of value (kind of like gold) and as a way to transfer value.
ETH is not deflationary and it is a good candidate to be used as currency.
The characteristics that make Bitcoin unsuitable as a currency right now isn't is deflationary printing, it's that it's unregulated, uncontrolled, and subject to tragedy of the commons (as is seen with the multiple rejected block size increases).
APY on stacking won't be as good as today. I am not sure everyone will stake once ETH2 rewards will be around 1-2%.
ETH2 won't be deflationary because such things is nearly impossible in a PoS network. You need issuance to rewards validators. It can't be network fees because if network fees are high, the network is doom to fail.
Also shortsighted. With increased ability to convert between hard currency and bitcoin it will be more practical for criminals to move large amounts of cash. The overhead of existing money laundering is significant -- the expression "follow the money" exists because it's a useful attack on criminal activities.
Money laundering is one problem; getting a large payment of cash is another, particularly if you're in the business of, say, demanding ransoms. This story was posted recently: https://news.ycombinator.com/item?id=27396804
Her reasoning was: "what people need to understand is, 95% of money laundering with fiat currency already succeeds today without getting caught."
In other words, this won't really change much, it was already really hard to catch money laundering.