According to a new article ‘Internet Policy Review’, written by Andy Yee, bitcoin is likely to become “the Internet of money” given its correct regulation.
Yee, an analyst for Google APAC division, considers that businesses connecting consumers and investors with bitcoin should be regulated. He added that developers and users are a poor target for regulation due to broader nature of the Internet.
He wrote: “The logical and user layers are populated by private actors from the bitcoin community and real economy respectively. These actors are small and can easily escape from regulation and enforcement. At the information layer, intermediaries of various kinds have emerged to bridge the two networks. Their position in the Internet architecture enables them to capture information flows and identify wrongdoers. In addition, they are larger and more established actors, making them more amenable to state regulation.”
A lot of politicians and policy makers expressed concerns that bitcoin lacks legal control. Yee suggested that rules should apply to services handling money instead of services creating digital currency software. He added that the block chain gives regulators all necessary data.
Yee noted that rules targeting the financial companies should be utilized to regulate virtual money. He wrote: “These laws and regulations of general applicability can in theory be applied to the emerging non-financial, information-based companies in the bitcoin economy. But a balance needs to be struck between eliminating instances of gatekeeper-aided wrongdoings and avoiding excessive burd.”
Yee also addressed the use of bitcoin for illegal activities, including its use in the drugs market. He said the regulators can target drug dealers but should avoid harming law abiding members unnecessarily.
Yee stated: “Criminals need to go through intermediaries in this layer to exchange between the bitcoin and real economies. As a result, these exchange mediums collect and retain significant amounts of information, which can be utilised by law enforcement to detect money laundering and the underlying criminal activity.”
He concluded that any legal framework applying to digital currency need to be based on an “adaptive” approach. Financial regulators can “ensure that illicit activities can be deterred while ensuring that society can fully benefit from the innovation and creativity on the bitcoin network.”
Yee is not the first Google worker who speaks about the bitcoin and the block chain technology. For instance, Google director of ideas, Jared Cohen, called bitcoin “inevitable” at the SXSW conference this year.
Bitcoin has been on Google’s radar since 2011, when Wikileaks founder Julian Assange advocated for the cryptocurrency while speaking to Cohen and Google chairman and then-CEO Eric Schmidt.