From the time of the very launch in 2009, bitcoin has been arousing rather conflicting emotions – from passion to serious skepticism. There have been many people supporting the innovation and continually proving that bitcoin is worth looking closer while there are others – underlining the unreliable nature of the cryptocurrency. Bitcoin devotees used to avoid government legislators or regulators and regulators were certainly skeptical about the cryptocurrency.
The situation changed five years later. In 2014 bitcoin community observed a serious shift in the attitude of government officials to bitcoin. CNBC reminds of the Securities and Exchange Commission and Commodity Futures Trading Commission that have approved certain bitcoin/blockchain-related activities under their jurisdictions. The Internal Revenue Service has concluded that cryptocurrencies such as bitcoin are taxed as “property.” The Chamber of Digital Commerce, launched in Washington, DC, has contributed considerably to help public policy makers understand the potential promise of the blockchain technology.
At the dawn of internet appearance, the Clinton administration developed an initiative to protect the fledgling idea from the overregulation. The aim of the 1997 Framework for Global Electronic Commerce was to secure innovation from negative impact of laws and regulation. Current CFTC Commissioner Chris Giancarlo has recently appealed to Barack Obama to ensure protection for bitcoin.
Bart Chilton, former commissioner at the CFTC, agrees that particular proactive step(s) such as a self-regulatory organization (SRO) and/or word from Barack Obama are needed now to support bitcoin and allow the U.S. economy to enjoy potential enormous benefits that the cryptocurrency can offer.
“With an available supply of more than 15.5 million bitcoins, the digital currency now has a market capitalization of nearly US$7 billion, according an estimate by market-data site CoinCap. That’s to say nothing of the colossal commercial value of blockchain endeavors which could help fuel-inject the economic engine of our democracy”, says Chilton.
The regulation of the cryptocurrencies in the USA differs much from the European one. The European Union has come up with a business-friendly regulatory regime for e-money and authorized payment institutions. The system operates all over EU member states under the so-called “passport” system. As a result Europe enjoys a much friendlier regime comparing to the fragmented state-by-state regulation of equivalent U.S. institutions.
Chilton encourages Barack Obama and U.S. government officials and industry thought-leaders to find an appropriate balance between basic consumer protection regulation, that in no circumstances stifles the innovation, and openness and promotion of bitcoin. It worked with internet development. Now it must work with bitcoin.