According to a recent paper published by Bank of Canada, researches explain that Bitcoin regulation is necessary for it to reach worldwide success.
A paper published this week, in fact, suggests that digital currencies like bitcoin won’t succeed in the long-term without any government support.
To write this research, experts examinated the viability of virtual currency, looking to previous examples of Canadian currency such as the so-called “Dominion” as a guide.
This is not the first time Bank of Canada is involved in blockchain and bitcoin-related projects.
A few months ago, in fact, we saw Bank of Canada involved in the so-called “Project Jasper” to develop a prototype system for issuing a bank-backed digital currency and a payment system using the technology.
While we are still waiting to know more details about Project Jasper, the just released paper explains a common thinking among central banks on the topic of cryptocurrencies: bitcoin and other private digital currencies need goverment support to succeed.
“We conclude that well designed and managed private digital currencies could circulate widely but only with appropriate government regulation to ensure their safety, soundness, and uniformity.”
Bank of Canada has already expressed its concern about digital currency, saying a few years ago that digital money popularity could reduce the effectiveness of monetary policy.
“A central bank can always get its digital currency into circulation, but its digital currency will not necessarily drive out existing private digital currencies,” wrote the authors of the paper.
From Poland to Denmark, from Switzerland and Japan, several countries all around the world are working on Bitcoin regulation projects.
Recently European Commission created also a task force to study and regulate digital currencies and the blockchain within the whole country.
Click here to read more about Bitcoin regulation in Europe and beyond.
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