Despite a hotly contested presidential race, a new consensus among US congress members shows that they need to learn more about bitcoin and blockchain technology before any action is taken.
It is well documented that many lawmakers around the world are unsure of both bitcoin and the blockchain technology that supports it. Even the legitimacy earned in Japan was done so after the Mt. Gox scandal. The result of legal guidelines has been an upsurge in trade for bitcoin in the Japanese market.
One of the biggest fears of the digital currency industry is legislation. The concern of strict controls and heavy handed bureaucracy being imposed not just on the businesses involved in the digital currency industry itself, but of use of digital currencies themselves, has long been a contentious issue around the world. With the introduction of new legislation that refines the registration requirements of digital currency exchanges, as well as defining digital currencies as ‘money’ when applied to money laundering laws, the British Crown dependency Jersey has taken a path that offers protection for users without the restrictions of some alternatives.
Defining the legal status of digital currencies has become something of an issue, with contrary rulings coming one of after the other, no sooner has one judge ruled bitcoin is not money, another judge in New York, Judge Alison Nathan, rules that it is money and should be treated as such in the case she is presiding over. This illustrates a clear need for legal ruling, especially in the US, to enable the industry to move forward. A final decision is important to the broader digital currency industry and will be needed for new initiatives to succeed.
With many different businesses and initiatives all working on endless adaptations of blockchain technology to enhance and sometimes radically change existing systems and processes, there is a danger of ending up with a mess of incompatible, bespoke blockchain solutions rather than a cohesive, interoperable network of blockchain based infrastructure. The International Organization for Standardization has recently approved a proposal by Australian Standards, the national standards agency, for a framework for Blockchain standards. Australia will now take the lead as a committee of ISO members seek to define standards for various aspects of blockchain technology.
The idea of a digital currency has spread across every continent and almost every country since the launch of Bitcoin in 2009, but it has met resistance throughout that journey from law makers and regimes right across the world. One of the most hostile regimes towards digital currencies has been that of Russia, who were even going as far as criminalizing the use of a digital currency, with a penalty of a fine of up to $40,000 or even prison sentences. However, last week that proposal was scrapped, and with a slightly less aggressive stance towards cryptocurrency in the country, just days later Moscow saw the opening of its first Bitcoin exchange.
Digital currencies have been causing law makers problems since they first appeared, oversight and control of a distributed system has been a challenge non have yet to conquer. However, some oversight of the industry will likely always be necessary, it is finding the balance between preventing fraudulent behavior and ensuring that cryptocurrencies can be used effectively. The latest attempt to strike that balance is in California, where a new Bill has been put forward to overhaul legislation pertaining to businesses involved in the digital currency industry.
The latest cryptocurrency-related news out of Australia really shouldn’t come as a shock at this point, since it is based in part on one of the most enduring arguments relied on by governments around the world as they attempt to come to terms with digital currencies. That argument has been made, called into question, refuted, and made again so many times now that most of us know it by heart: Terrorists need funding. Terrorists might use cryptocurrency to fund their operations. The only way to stop that is for government to regulate and monitor cryptocurrency transactions. You know the rest, of course. War is peace. Freedom is slavery. Ignorance is strength. Did I miss anything? Terror is, after all, the best excuse any government can use to seize more control over our lives.
With the recent changes to their licensee code of practice, the UK Gambling Commission, who oversee the gambling industry within the UK, has noted that it now considers digital currencies a cash equivalent payment system for gambling purposes. This move could be significant as it opens up a huge opportunity for the cryptocurrency industry, with UK gambling with around £4 Billion a year. Digital currencies themselves are ideal for such applications, and could begin to make inroads with a new user base when the advantages over existing fiat payment systems become clearer.
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One of the notable things that has happened regarding both digital currencies and blockchain over the last two years is an increase in interest in both by major financial institutions, including several central banks. This interest has resulted in several working reports and ideas that would mean a significant change in within the industry in terms of public awareness and viability, and a new report from the Central Bank of England has furthered this. With the detailed look at central bank backed digital currencies, they show where the benefits could be.
How the digital currency industry continues its expansion is one of the most difficult challenges facing cryptocurrency today. While it is clear that vendors are going to have to lead the way in some aspects of adoption, the industry also needs to have those championing the technology in areas of influence too. This is why a new resolution put forward to the U.S. Senate that calls for a unified government program to promote the adoption of new technology to enable consumers to take advantage of all the benefits they bring is so important. Focusing on the benefits of digital currencies and blockchain, it offers a look at where the industry could grow.
The public perception of the digital currency industry is a vital part of its ability to grow, prosper and gain users. For a long time, many detractors of the concept of digital currency and those seeking to delegitimize the very idea of a currency outside the control of the traditional financial construct, have used the idea that Bitcoin is the domain of the criminal, used for illegitimate means to push that attempt. A recent report by researchers has thrown a more accurate light on what Bitcoin actually is used for by careful analysis of transactions. The results show that the vast majority of all business conducted in the digital currency, just as with the fiat system, is legal and consists of normal payments for products and services.
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With state-by-state licensing being a well observed issue and roadblock to innovation and progress within the U.S cryptocurrency industry, the U.S. Office of the Comptroller of the Currency is looking for industry input into the situation. Many in the industry are looking for some form of national licensing to replace the current system and help the industry grow and innovate more easily. The process is still ongoing but this move from government represents a significant step in the development of the digital currency industry within the U.S.
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Russia’s Central Bank has again reiterated its commitment to exploring the opportunities that blockchain technology brings throughout a variety of applications. Noting its potential in payment systems, documentation verification and interbank transactions within the financial industry, the benefits of security and accountability of the technology could provide improved platforms for these services. Additionally, the Central Bank also noted that the idea of a Central Bank issued digital currency is still recognized as something that could be of benefit to the Russian people, although there are still issues to overcome for that to be possible.
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