Is ‘Playing by the Rules’ Going to Promote Bitcoin?

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by Eugenia Romanenko · 3 min read
Is ‘Playing by the Rules’ Going to Promote Bitcoin?
Photo: juriyrus/Flickr

The question is still open: Will the government regulation improve the cryptocurrency that was originally decentralized?

It’s known that the first decentralized cryptocurrency’s creators’ aim was to launch a virtual currency that the government wouldn’t reach. And they did it. Moreover, that currency became popular and managed to attract lots of fans, being one might say a ‘central bank-free’ system not linked to any government or geopolitical circumstances.

But the truth is that the decentralized currency’s enemy is making its prices boost now. The regulated US Bitcoin exchanges’ appearance and the government’s plans to launch BitLicense have recently sent Bitcoin’s cost up to 30%.

Anyway, it’s great news for Bitcoin enthusiasts because in 2014 the most discussed currency was infamous for its plummeting prices (from $100+ to less than $200). It was even called the worst investment of 2014.

It’s obvious that it’s not easy to make the government fully approve and accept the brand-new currency. The well-known Winklevoss twins started their company called ‘Gemini’ aiming to build the first regulated Bitcoin exchange in the U.S. Their firm is cooperating closely with regulators. That fact helped them have a very important thing: a bank account with an American bank. The brothers believe that Bitcoin will survive only if it has regulatory oversight. Now, they need to obtain a license to operate a new exchange.

Not long ago, another Bitcoin company called Coinbase announced the launch of the “first regulated Bitcoin exchange in the US.” About 2.2 million consumer wallets are linked to the company and almost 40,000 merchants use its services.

It counts about 75 employees and is planning to work in at least 30 countries by the end of the year. The firm received large investments from powerful firms such as BBVA and the New York Stock Exchange. Nevertheless, Quartz reports that according to California and New York officials, “the exchange was actually not regulated by their state laws.”

“We are working with several companies, including Coinbase, on licensing and will continue to move forward expeditiously,” Matt Anderson, a spokesman for New York’s Department of Financial Services, tells to Quartz.

However, any licenses are still not released. According to Shelly Banjo’s post, “if Bitcoin becomes standardized and regulated, it could potentially become as ubiquitous as the credit card. That means big payoffs for Bitcoin-related companies—and for the VC funders behind them’.

John Collins, Coinbase’s head of government affairs, said to Quartz that regulation will make Bitcoin “accessible for the average person.”

Well, opinions differ as well as possibilities.  But anyway, probably it’s true that when you create something particularly new, t’s necessary to play by the rules.

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Eugenia Romanenko

Eugenia graduated from Minsk State Linguistic University with a degree in Intercultural Communication, Translation/Interpretation (Italian, English). Currently she works as a business analyst, freelance interpreter and tutor. She’s fond of numismatics, photos, good books and sports, adores travelling and cooking.

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