Quite a few Bitcoin enthusiasts are closely eyeing the regulatory proceedings in the United States. Multiple states are looking at ways to give Bitcoin a legislative and regulatory framework, affecting both individual users and companies in the area. After the disaster of BitLicense, California was the next state on the list to propose a framework draft. That Bitcoin bill was shut down quickly though, as it failed to pass in Legislature a few days ago.
Bitcoin and other virtual currencies offer tremendous potential in terms of creating additional jobs, wealth and economic stability all over the world; it should come as no surprise then to find out these are three of the key reasons why government officials are not too keen on Bitcoin becoming a part of their economy. After all, if wealth would be distributed on an even playing field and decentralization is the new way of life, what do we need governments for?
The Reserve Bank of India has once again indicated its desire to regulate all activities related to Bitcoin and other virtual currencies in the country. Given the decentralized nature of these currencies, with no “backing” in place, the Reserve Bank of India fears virtual currencies will put the country’s financial ecosystem on its head. While this may be what Bitcoin was set out to do, strong opposition from government officials could present quite the roadblock.
One of the most worrying aspects of the BitLicense regulatory framework is the exodus of Bitcoin companies in the New York State area. Over the past few weeks, it has become quite clear that companies deciding to be compliant with BitLicense might face some serious backlash from its users. For those of you who are wondering which companies are actively pursuing a BitLicense, the following short list will give you an idea.
Bitcoin could do a lot of good in continents such as Africa, where there is a huge lack of financial services. This doesn’t mean the African population is not worthy of financial services, but institutions simply don’t expand there due to there being little to no profits to be made from doing so. Nigeria, on the other hand, is calling for Bitcoin regulation to counter money laundering and avoid international penalties.
The Bitcoin situation in Tokyo could very well shape the future of virtual currencies in Japan. Two weeks ago, the Tokyo District Court judged that Bitcoin are not subject to ownership. With the Mt. Gox investigation looming overhead, plenty of affected users were hoping to see a different outcome so they could recoup some of their losses. However, there are some vital points to be made regarding this judgement.
It was only a matter of time until the BitLicense regulation started claiming more victims in the Bitcoin mining industry. Not only are individual miners under the scrutiny of becoming money transmitters, but mining pools and even cloud mining providers could be affected as well. Genesis Mining, one of the very few legitimate cloud mining companies, will no longer accept customers from the New York state area.
The Bitcoin regulatory measures in the state of New York are causing quite a bit of controversy. Right now, there are more companies halting their service in this part of the world compared to the number of applications for a BitLicense. Even though regulation is necessary, too severe regulation leads to a mass exodus of companies. One of the few major Bitcoin companies completely unaffected by this regulatory measure is Bitcoin wallet provider Airbitz.
Bitcoin regulation is a topic of heavy debate around the world, especially since the BitLicense requirements were made publicly available. In the United States; every individual state can draft their own Bitcoin regulatory requirements, and it looks like California will be the next place to do so.
Bitcoin Regulation To Harm Innovation?
One of the main concerns surrounding Bitcoin regulation is whether or not local requirements will be beneficial to technological innovation in the digital currency space. There will always be different opinions regarding this matter, and in California, the pending Bitcoin regulation is causing a disruption between several parties.
BitLicense is the first proper form of Bitcoin regulation in the United States, even though most Bitcoin companies do not agree with the proposed requirements. Whereas several Bitcoin exchanges are leaving the New York state area, Bitstamp has announced they will, in fact, be applying for a BitLicense in order to comply with current regulations.
BitLicense Causes Lots of Controversy
Bitcoin regulation is still an important aspect for digital currency to be recognized as a legitimate form of digital money. Yet at the same type, the first revisions of Bitcoin regulation are quite harsh, especially as far as BitLicense is concerned. Applying for a license is expensive, and there is a thorough process every company has to go through.