Opponents of Bitcoin, including governments, both Federal and State here in the U.S., and national governments elsewhere, face a dilemma. They disparage the crypto-currency by claiming that it is not a currency at all, just some artificial creation without worth, but this assertion presents them with a problem. If Bitcoin is not a currency and has no intrinsic value, how do you regulate it and, more tellingly, how do you enforce those regulations? <\/p>\n
I discussed last week why I believe attempts to ban virtual currencies are not just fundamentally mistaken but also futile. That leaves governments in a situation of having to regulate the trading and use of them if they are to exert any control whatsoever. I am not one of those who believe that government involvement in anything is intrinsically evil or dangerous, and that any level of control and regulation is therefore, by definition, undesirable. I can accept that the motivation of some may be noble. <\/p>\n
The financial world is littered with examples of fraud and theft and governments have a duty to protect, so some legally enshrined protection is probably warranted. That protection can only come, though, once governments make it clear that Bitcoin is a currency, not some crazy speculative game. To be fair, most countries around the world seem to be doing just that. Most of the published verdicts of governments around the world take the form that they do not regard Bitcoin as legal tender, but they recognize its status as a currency. Incidentally, the whole legal tender thing can be misleading to some. That a currency is not legal tender doesnt make it worthless; it simply means that merchants are not obliged to accept it in payment. <\/p>\n
In the U.S. there has been little in the way of direct government definition, but the courts are leading the way. Court documents from the recent SEC vs. Trendon Shavers case resulting from a Bitcoin Ponzi scheme included Judge Amos L Mazzants assertion that Bitcoin is a currency or a form of money Apart from the somewhat cynical observation that having its own Ponzi scheme is a definite sign that Bitcoin is gaining ground, this judges assertion and other similar comments from the bench are significant. If courts treat Bitcoin as a currency, then the Federal government has little choice but to follow suit. As more and more countries around the world reach the same conclusion, often no doubt motivated by the desire to tax rather than protect their citizens, it becomes harder for the outliers to deny the legitimacy of Bitcoin. <\/p>\n
Governments, then, and even some individuals, are being forced to accept that Bitcoin is, at least, a currency. That process will presumably be expedited by the announcement that Circle, touted as the first Bitcoin bank, is opening up to a global customer base. That is interesting and a banking system adds to the acceptance of crypto-currencies as just currencies, but the real news is that Bitcoin balances will be 100% insured. Some still have doubts about the security of a virtual currency and this re-assurance for them is welcome news. <\/p>\n
I have maintained for a while that greater acceptance for Bitcoin is inevitable and that one of the first steps towards that is the general recognition that it is a currency just like any other. Now that it is clear that people can be defrauded of it (and the fraudsters punished) and that governments, bankers and insurance companies can all get in on the action, that recognition is looking closer every day. <\/p>\n
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.<\/p>\n
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Bitcoin Looks More Like A "Real" Currency Every Day<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Opponents of Bitcoin, including governments, both Federal and State here in the U.S., and national governments elsewhere, face a dilemma. They disparage the crypto-currency by claiming that it is not a currency at all, just some artificial creation without worth, but this assertion presents them with a problem. If Bitcoin is not a currency and has no intrinsic value, how do you regulate it and, more tellingly, how do you enforce those regulations? Continue reading