The article overviews the CFTC position on bitcoin regulation, discusses the recent bitcoin project launches, including a cryptocurrency exchange, commissioned in Nigeria, and a new bitcoin payment terminal in Germany.
Interview with CFTC Commissioner Mark Wetjen
Last year, the regulators within the Commodity Futures Trading Commission (CFTC) focused largely on the question of bitcoin regulation. The organization even held a conference discussing the bitcoin influence on the economy.
In a recent interview to CoinDesk, CFTC commissioner Mark Wetjen covered the issues of bitcoin definition and the world cryptocurrency derivatives market, noting that the situation depends totally on the bitcoin industry. While he admits the potential behind the bitcoin technology, the entity has yet to clarify its position on digital currency.
Mr. Wetjen said: “It depends on whether there is anything bitcoin-related for the CFTC to consider. At the moment, there’s nothing before the CFTC itself to decide upon.”
TeraExchange is by far the only company, bitcoin derivative of which was approved by the CFTC. Although the CFTC defined bitcoin as a commodity, more detailed definition has to be given. Under the CEA documents, bitcoin can be described as ‘rights or interests in which a contract for future delivery is or will be dealt in’ and it is the best definition of bitcoin according to Wetjen.
Speaking on how the agency can influence the bitcoin industry in the future, Wetjen noted the regulation is unlikely to urge new startups entering the industry.
“If someone wants to hedge their bitcoin exposure, and if they’re US persons, then they need to do that on a regulated, licensed exchange, such as a swaps execution facility, designated contract market or a foreign board of trade,” he said. ”We’re not trying to skew the market. We’re trying to make sure that our statutory mandate is being met and that the public is being protected accordingly.”
However, he also added the registration with the CFTC is required if the merchant is utilizing derivatives platforms. Speaking on the CFTC’s plans in 2015, Wetjen said the agency is not going to return to the subject and everything will depend on the industry.
The First Bitcoin Exchange in Nigeria
Gareth Grobler, ICE3X founder, said: “The market… is potentially massive. VoguePay have spotted the opportunity bitcoin offers, seeing as one of the primary attributes of bitcoin is its security. Nigerian online consumers simply do not have the same access to goods and services from international vendors due to one simple thing – credit card fraud. Bitcoin solves that problem… The idea is that, for example, a farmer in Nigeria can buy a tractor from a supplier in the USA, and both parties could benefit from the near instant, secure and transparent funding solutions underpinned by the bitcoin technology.”
Besides, the exchange projects to make it possible for local merchants to accept payments in the digital currency.
Grobler believes the introduction of bitcoin could have positive influence on the Nigerian economy: “We have to be realistic… Bitcoin technology has yet to be packaged and applied correctly for it to be a mainstream alternative currency, but as an agnostic payment settlement mechanism within a larger framework it ticks all the boxes and could perhaps have a significant impact on shaping the Nigerian digital economy landscape.”
3D-printed Payment Terminal
Ricardo Rivero, a businessman from Hanover, Germany, introduced PEY, a prototype of a 3D-printed payment terminal. The users of PEY terminal, which uses iBeacon technology, can install the app on their devices and know through push notification if the retailer accepts bitcoin.
The app communicates with the PEY terminal so the users don’t have to search for the bitcoin wallet on the phone. Payment data is transmitted through NFC. In order to finish the transaction, the user can just scan the QR code provided by BitPay. The PEY app is already available in the app store.
There are a lot of merchants in Hanover that already accept digital currency payments through BitPay and PEY terminal. Moreover, 38 new retailers plan to start using PEY terminals for bitcoin payments. The city is known for its “Bitcoin Boulevard”, a street with a range of businesses accepting the cryptocurrency.
Rivero is excited about the large number of retailers that have already signed up for the app and believes the project will contribute to further expansion of virtual currency. He is delighted that so many retailers have signed up so far, and would love for Hanover to become a leading city in the growth and expansion of bitcoin.
Meantime, BitStamp, which planned to join other companies at CES, announced it has lost more than $5 million or 19,000 BTC and couldn’t appear at the event. The unknown number of users’ wallets were compromised by hackers. BitStamp, which had been suspended for the attack investigation, later resumed its services and claimed it had upgraded the systems to ensure high level of security and customer protection.