Now that the year 2015 is in the books, Bitcoin enthusiasts and investors are looking ahead to what 2016 will bring for the digital currency. The past twelve months saw a record amount of VC funding flowing to various Bitcoin companies and startups, despite the not always positive news about Bitcoin. Will 2016 be the year of digital currency, or will the entire ecosystem be undermined by a certain type of user?
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?
Bitcoin exchanges have to keep up with the competition if they want to stay relevant while adding innovative new features to their platform. Sometimes, those new features come in the form of taking a huge gamble to facilitate the buying and selling of Bitcoin. Even though credit cards were never intended to be used for online purchases, Bitcoin exchange Coinbase will start accepting card payments very soon.
Coinbase’s Aggressive Expansion Plan
The name Coinbase is synonymous with buying and selling Bitcoin in the United States, as well as 27 other countries around the world. Ever since the company opened its doors to the public, it became adamantly clear Coinbase was forging a path of expansion and did so at an aggressive rate.
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.
Bitcoin regulation and more specifically the BitLicense debacle, will be making headlines for many more weeks to come. As the BitLicense application deadline is almost upon us, companies are forced to either apply or halt their services in the state of New York. Several companies have decided on the latter option as very few BitLicense applications are coming in. That being said, it looks like Coinbase, just like Bitstamp, will be applying for a BitLicense.
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.
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.