22 Oct
0
EU’s Top Court Rules That Bitcoin Exchange Is Tax-Free
(Bloomberg) Bitcoin and other virtual currencies can be exchanged tax free, the
European Union’s top court said in a ruling that puts them on a more
equal footing with traditional cash.
European Union’s top court said in a ruling that puts them on a more
equal footing with traditional cash.
Value added tax — a type of
sales levy — needn’t be applied because the business involves “the
exchange of different means of payment,” the EU Court of Justice in
Luxembourg ruled Thursday. The case was triggered by a dispute in
Sweden, where David Hedqvist set up a service for the exchange of
mainstream money for bitcoin and vice versa.
sales levy — needn’t be applied because the business involves “the
exchange of different means of payment,” the EU Court of Justice in
Luxembourg ruled Thursday. The case was triggered by a dispute in
Sweden, where David Hedqvist set up a service for the exchange of
mainstream money for bitcoin and vice versa.
Bitcoin
currency, introduced in 2008 by a programmer or group of programmers
under the name Satoshi Nakamoto, has no central issuing authority and
uses a public ledger to verify encrypted transactions. It has gained
traction with merchants selling legitimate products but also has been
used to facilitate illegal transactions because money can be transferred
anonymously.
currency, introduced in 2008 by a programmer or group of programmers
under the name Satoshi Nakamoto, has no central issuing authority and
uses a public ledger to verify encrypted transactions. It has gained
traction with merchants selling legitimate products but also has been
used to facilitate illegal transactions because money can be transferred
anonymously.
“Transactions
to exchange traditional currencies for units of the bitcoin virtual
currency (and vice versa) constitute the supply of services” under the
bloc’s law “since they consist of the exchange of different means of
payment,” the court ruled. As such they are exempt from value-added
taxes, it said.
to exchange traditional currencies for units of the bitcoin virtual
currency (and vice versa) constitute the supply of services” under the
bloc’s law “since they consist of the exchange of different means of
payment,” the court ruled. As such they are exempt from value-added
taxes, it said.
To exclude such transactions from the tax
exemptions given to traditional exchanges “would deprive it of part of
its effects,” given that the exemption’s aim is to counter “the
difficulties connected with determining the taxable amount and the
amount of VAT deductible” in cases of taxation of financial
transactions, the court said.
exemptions given to traditional exchanges “would deprive it of part of
its effects,” given that the exemption’s aim is to counter “the
difficulties connected with determining the taxable amount and the
amount of VAT deductible” in cases of taxation of financial
transactions, the court said.
Open your free digital wallet here to store your cryptocurrencies in a safe place.
7 Oct
0
New North Carolina Money Transmitter Bill Could Push Out Bitcoin Companies
How many Bitcoin companies operate in North Carolina? How many will there be? A new piece of legislation making its way through the North Carolina State Senate is attempting to enact further regulations on companies that handle digital currencies such as bitcoin. Originally sponsored by a state representative that also happens to be a vice president at Wells Fargo, the North Carolina legislature has moved forward with H289. H289 has made it through the North Carolina House of Representatives, and has started making its way through their state Senate. Luckily for us, the new senate bill S680 will not be voted on until Spring 2016. S680 is officially drafted by the North Carolina Banking Commission, which specifically mentioned that the proposed legislation is coming about as a result of requests by certain companies seeking clarity about digital currency regulation. It’s pretty easy to figure out which company that is.
The Politician Forgot to Take Off his Banker Hat
Before delving into the implication of this new update to the North Carolina Money Transmitters Act, we should consider the ridiculousness of how it came to be in the first place. The Representative that forgot to take off his hat was none other than Republican Representative Stephen Ross. Officially, his title is Executive Vice President, and he often votes on and sponsors financial industry related bills. Ross has also voted to protect officials that refuse to perform same-sex ceremonies. Such a bill has thus far only seen success in Utah.
A much better example of how to wear two hats can be found in a Virginia Representative. Mark Keam, a vice president for Verizon Communications has vowed to abstain from voting on issues that might present a conflict of interest with his Verizon job. Why this isn’t a basic requirement is still baffling to me. More importantly, Keam committed to not submitting any telecommunications bills during his time on the job. Representative Stephen Ross, from just a state south of Virginia, is truly only representative of the perceived political corruption and rot that fuels the anarchist movement. In a world where people are wearing more hats, both literally and figuratively, better rules to weed out moral hazard and stymie conflicts of interest are needed. More importantly, people who will follow these rules, and not bend them until they break, are also needed.
Coinbase Supports This Bill
As Bitcoin company BitGo’s engineer Jameson Lopp notes in a Medium article, Coinbase is the only Bitcoin company with lobbyists in North Carolina and it is believed that these lobbyists are actively pushing for more regulation of Bitcoin companies. These regulations would benefit companies such as Coinbase but would damage the efficacy of other smaller companies in North Carolina. In fact, Coinbase published a blog post where they praised the proposed legislation out of North Carolina. Coinbase wrote:
“We want to thank the NC Bank Commissioner’s office for engaging with industry while modernizing its MTA and working to make NC a welcoming place for tech innovation. Please join us in thanking both Representative Ross and Senator Gunn, who sponsored the legislation in the NC House and Senate, respectively, and in urging the NC Legislature to move quickly in passing the legislation.”
Proposed Changes May Harm Some Bitcoin Companies
Previously, the net worth requirement for receiving a license and being a fully legal Bitcoin company in the state was 100K, now it could be 250K. Depending on the volume your company handles, the surety bond that you need to provide could cost as much as 100K more than the previous $150K amount. The application fee itself has increased from $500 to $1,500 and the annual assessment fee has been raised to $5,000 and also heightens depending on transmission volume.
As Coinbase has settled itself into North Carolina. Other Bitcoin companies, such as Xapo and CoinOutlet, have announced their departure from the state. Jameson Lopp hopes that S680 can suffer a fate similar to AB1326 in the California legislature. He is working with the Chamber of Digital Commerce to create amendments to the bill that would exempt certain types of entities or activities from this legislation, and potentially give some Bitcoin companies some breathing room. However, he notes that the complete defeat of the bill is a preferred outcome.
About the author: Caleb Chen is a cryptocurrency advocate and is a research assistant at the Chamber of Digital Commerce.
Open your free digital wallet here to store your cryptocurrencies in a safe place.
21 Aug
2
Goodbye For Now, NYC
After carefully considering the recent introduction of the BitLicense, HolyTransaction has decided to suspend its business within the state of New York, until such time that more reasonable regulations are put into law. It is unfortunate that the politics in New York have led to this stifling of innovation. Our community is still new, still growing. To limit the possibilities of this technology now would be akin to cutting a flower before it has bloomed.
For those who do not know, BitLicense is over regulating in a number of unfortunate ways. First, and most often cited, is the cost for a business to obtain the license itself. BitStamp has estimated that they have paid nearly $100,000 to apply, between legal fee’s, time allocation, and maintaining compliance.
What happens when every state in the U.S., or every country in the world, crafts their own BitLicense? Businesses will be expected to pay for separate licenses in every area in which they operate; potentially a multi-million dollar requirement that could shut the lights off at many of crypto companies, leaving standing only those who have chosen to comply with rules set out by the very institutions that Bitcoin has rallied against. Abandoning business in states who insist upon excessive profiteering from unnecessary regulation is our best option for the moment.
Our most significant qualms with the BitLicense are directly related to the implications for our customers and their privacy. Some countries have taken a divisive stance on compliance that has led to outrage and feelings of betrayal amongst many of Bitcoins core users. KYC and AML laws have been forced upon every company in the U.S., for instance, that directly hold or handle their customers money. You may have noticed that wallets, or those who once allowed you to trade cash for coins, have suddenly become very interested in your private information. While it has led many to revile these companies to whom they were once loyal, the truth is that these businesses have no choice.
BitLicense makes its greatest error though in its premature attempt to define what Bitcoin is. The blockchain is such a new frontier for technology that confining the tools built on top of its framework to the parameters of “money” or “property” would be limiting. The only technology with which Bitcoin compares is the Internet, which was once considered to serve the near-exclusive function of sending super fast, super cheap messages in the form of e-mail. Consider what the Internet would be today if it had not been allowed to grow in its earliest years; if it had instead been listed as a postal technology, and had then been regulated as such. This would have limited its development and, ultimately, it would have never become the open forum of information and discourse that our modern world is reliant upon. You cannot know what a technology will become tomorrow if you insist on defining it today.
The circumstances surrounding our and many other company’s exit from New York are unfortunate, but we are holding out hope that future rulings from other jurisdictions will be more reasonable. To our customers, our friends, and our supporters who are affected by this change, we sincerely hope that you will continue to work alongside us to keep the Blockchain open and free, and that we at HolyTransaction will be able to be of service to you again very soon.
Open your free digital wallet here to store your cryptocurrencies in a safe place.
6 Aug
0
Bitcoin’s Monthly Recap of July 2015
Welcome to HolyTransaction’s seventh monthly recap for the year 2015. This past month of July has been marked by several long awaited news and events; during that time, the bitcoin price fell from a low of $272.50 on July 1st to a high of $280.19 on July 31st, according to Bitcoin exchange Bitstamp.
Ethereum Genesis Block Released and Mining Begins
Ethereum promises to do for contracts what Bitcoin has done for payments, and its release marks a new frontier in crypto/bitcoin 2.0. In fact, Ethereum’s launch product was called ‘Frontier’ and along with an ingenious open source method for generating the genesis block, Ethereum has started its decentralized app network. Many have complained that the bare-bones, command line interface of the release is unnecessarily elitist and keeps the network small and limited to those with extensive technical know-how. Ethereum notably raised $18 million USD in late 2014, and is now on its way.
Proposed California Bitcoin Regulation Moves Forward In Better Light Than BitLicense
AB 1326, which is making its way through the California legislative process currently, has gotten a vote of approval from Bitcoin regulatory lobbying firm Coin Center. After receiving constructive criticism from Coin Center, the bill was amended to specify exactly that only companies holding customers’ funds need a license. Coin Center has a set state digital currency framework that it hopes to promote in each state. They, and the Bitcoin community, believe that companies that don’t hold customers’ funds should be free to innovate with the blockchain or a blockchain.
Bitcoin Malware on the Decline According to Kaspersky Report
A quarterly security report by the noted Kaspersky Labs has noted a lessening in the amount of Bitcoin malware since 2015 began. Kaspersky Labs is a noted security firm that has informed the public on many hacks in the past. Recently, Bitcoin malware such as cryptolocker has been used by hackers and has stricken people, corporations, and even governments across the world. Overall, in the 2nd quarter of 2015, Kaspersky Lab determined that 379,972,834 instances of computer infection occurred.
Former Reddit Employee Creating a New Decentralized Media Platform
A former employee of Reddit, Ryan X. Charles, plans to create a new app featuring a blockchain that would function like Reddit but be truly decentralized, getting rid of as many third parties as possible. Charles was initially hired by Reddit in 2015 to work on some sort of Reddit token; however, in the upper management tumult that rocked Reddit recently, Charles was let go and his project scrapped. Charles commented: “I’ve collaborated with a lot of other people to produce some of the fundamental software necessary to make a decentralized reddit. […] It’s not done yet and there is no prototype, but I would love to find collaborators to build something concrete.”
Open your free digital wallet here to store your cryptocurrencies in a safe place.
3 Jul
0
Bitcoin’s Monthly Recap of June 2015
Welcome to HolyTransaction sixth monthly recap for the year 2015. This past month of June has has been eventful for Bitcoin due to events within the Bitcoin ecosystem and from the general economic world as well; during that time, the bitcoin price fell from a low of $223.51 to a high of $272.50, according to Bitcoin exchange Bitstamp.
Russia Reverses Stance on Bitcoin Ban, Open to P2P Transactions
According to Russian media Izvestia, the Russian government is expected to reverse its stance on Bitcoin in the coming months. Over the last year, different arms of the Russian government have come forward with different opinions on Bitcoin, with the Central Bank being notably open to the idea of cryptocurrencies. This news comes on the heels of a reversal on a website ban affecting several Russian Bitcoin sites. Around the world, an anti-Bitcoin stance is increasingly becoming more and more unpopular.
Decentralized Marketplace OpenBazaar Receives $1 Million USD Funding
The decentralized marketplace project, OpenBazaar, has raised $1 million USD in funding from names such as Andreessen Horowitz and Union Square Ventures. OpenBazaar has sometimes been called the spiritual successor to infamous marketplaces such as the Silk Road. Of course, that is not the purpose of the project; however, the applications of a secure and open marketplace software has obvious implications for the black market. The infusion of venture capital money into such a controversial area shows the promise of Bitcoin technology in the world of commerce.
Silk Road Investigator Pleads Guilty to Money Laundering
In the latest drama from the Silk Road drug market takedown, one of two federal agents working on the Silk Road case has plead guilty to money laundering, extortion, and other crimes. Carl Force infiltrated the Silk Road marketplace as the head of the Baltimore-based team that took down the infamous site; however, while leading the investigation, Force stole money from Silk Road and the now convicted Ross Ulbricht. Force even signed a movie deal with 20th Century Fox to detail his exploits. Another agent, Shaun Bridges, also plead guilty to similar crimes.
Nasdaq Private Market Works with Chain to use Bitcoin
In a continued show of interest in Bitcoin technology, the Nasdaq OMX Group Inc. has chosen Bitcoin startup Chain to test a new type of trading. Using Bitcoin technology, Nasdaq hopes to secure the trading of private company shares. The Nasdaq Private Market currently services pre-IPO trading of shares in private companies and blockchain technology will manifest here first. Nasdaq’s CEO Bob Greifeld explained: “As blockchain technology continues to redefine not only how the exchange sector operates, but the global financial economy as a whole, Nasdaq aims to be at the center of this watershed development.”
Greek Economic Crisis Raises Bitcoin Awareness
For the last month, the world has been eagerly watching Greece struggle with the European Union over its debt and a proposed deal to save the beleaguered country. In the meantime, banks, PayPal, and Western Union have all taken a much-felt hiatus from the country, leaving the Greek people to suffer financially. In this economic turmoil, many have started learning about Bitcoin. Bitcoin companies across Europe are reporting increased levels of usage and activity from the Greek area. In 2014, when Cyprus was having similar issues, interest in Bitcoin also experienced a noticeable jump.
Open your free digital wallet here to store your cryptocurrencies in a safe place.
31 May
0
Bitcoin’s Monthly Recap of May 2015
Welcome to HolyTransaction’s fifth monthly recap for the year 2015. This past month of May has reminded everyone in the Bitcoin world why we are here; during that time, the bitcoin price fell from a high of $231 to a low of $223.51, according to Bitcoin exchange Bitstamp.
Roger Ver and OKCoin Dispute Over Bitcoin.com
Since the news months ago that the highly-visible Bitcoin.com domain would be managed by Chinese Bitcoin exchange OKCoin, things have really changed. In a series of Reddit posts, Roger Ver, OKCoin, and former OKCoin employees aired out all of their dirty laundry. Amid accusations of forged contracts and blatant lies, the spat resulted in a huge blow to the reputation of OKCoin. Bitcoin.com currently redirects to Bitcoin.org, which is maintained by the Bitcoin Foundation.
Bitcoin Exchange BitFinex Hot Wallet Hacked
BitFinex, one of the leading Bitcoin exchanges, has been hacked for just over 1500 BTC earlier in May. According to the exchange, trading was not affected and 99.5% of users’ funds were never accessible to the hacker. The hack, while unfortunate, demonstrates the efficacy of cold and hot wallets, which may have been the downfall of Mt. Gox. Notably, another European Bitcoin exchange, BitStamp, also suffered a hot wallet hack earlier in 2015.
Ross Ulbricht Sentenced to Life In Prison
Ross Ulbricht, the founder of the Deep Web marketplace Silk Road, has been sentenced to life in prison. Many in the community feel that a life sentence is too harsh given the nature of Ulbricht’s crimes. An appeal is planned by Ulbricht’s defense lawyer, Joshua Dratel. Notably, the trial which convicted Ulbricht did not allow the introduction of key evidence that may tell a different story. The sentence was passed by Judge Katherine Forrest, who was appointed to her federal judgeship on the recommendation of Senator Schumner, the first politician to publicly call for the takedown of Silk Road.
North Carolina Passes Bitcoin Bill
The House of Representatives from North Carolina has passed a new bill to modify the Money Transmitters Act. The bill, HB 289, specifically includes and clarifies the state’s stance on virtual currencies such as Bitcoin. The bill was introduced by Republican Representative Stephen M. Ross, who is also a VP at Wells Fargo. The Bitcoin community has been receptive to North Carolina’s clarification, which contrasts with actions from states such as New York. Perianne Boring, the founder of the Chamber of Digital Commerce, commented: “I would be rather straight forward and say that the community favors regulatory clarity over ambiguity that can create ultimately greater exposure for companies, especially those that do not have the legal budgets necessary to evaluate the ambiguities. The legislation represents a lighter touch than the NY DFS proposal by protecting the interest of consumers but not imposing any additional regulatory burdens or costs on business to business transactions. It also has avoided some of the pitfalls of existing statutory schemes. It may not be what a segment of the community wants – no regulation. But NC is not a no regulation state and this is a useful step forward in making the law work for digital currency companies.”
Ripple Labs Receives $28 Million USD in Funding
Ripple Labs, the company behind the Ripple payment protocol and network, has recently closed a $28 million USD funding round. This round marks their Series A funding and saw many participants from around the world. Ripple has made waves in the digital currency space by sealing deals with several banks around the world. However, Ripple has also faced increasing scrutiny from users wary of centralized control as well as Stellar, an offshoot created by one of Ripple’s original founders which even used some of the same code. Chris Larsen, Ripple Labs’ CEO, commented: “With investors like CME Group and Seagate joining the fold, we’re well positioned to accelerate adoption amongst these key customers.”
Open your free digital wallet here to store your cryptocurrencies in a safe place.
28 Dec
0
Russia reconsidering Bitcoin?
(CryptoCoinsNews) Could Bitcoin make it back into Russia? The latest news is that the draft law is in need of major revision as the Russian Ministry of Economic Development has not approved the draft in its current form. This is certainly not because of the desire to enhance freedom and liberty for Russian citizens, but because it may hurt Russian corporations ability to attract new business. The “quasi-money” designation includes things like gift cards and certificates that businesses use to bring in new customers. Banks, major retailers, and telecom companies would take a huge hit, and with the national GDP/economy is already having a terrible year, this bill does more harm than good overall.
“The proposed draft regulation act doesn’t solve any tasks assigned, but only serves to create legal barriers to the implementation of marketing programs of businesses and business development in general,” according to the Ministry of Economic Development.”
The issue with nation-states attacking Bitcoin out of defense of their currency is a complicated one. Many nations are in debt due to their debt-based fiat currency/central banking system. The current inherently flawed system is designed to leave nations indebted. Bitcoin and it’s potential growth leave open a way to build new businesses, generate new revenue streams by attracting investors, and ways for future taxation to help alleviate the nation’s indebtedness. Russia’s previous hard stance against Bitcoin was taken before many of their current economic issues and sanctions manifested.
Russia’s economic situation may continue to spiral downward, as they may soon suffer from restriction of access to the global financial system. In particular to the payment system SWIFT (Society for Worldwide Interbank Financial Telecommunication, which supplies secure messaging services and interface software to wholesale financial entities. An international banking computer partnership). Some critics say the government should pay more attention to financial innovations instead of trying to ban them.
Does this mean Bitcoin is in the clear? Not exactly. The bill most likely will be revised, but it may just benefit Russian corporations, but still restrict Russians ability to use electronic currency. The ban may just work around gift cards and bonus cards and remain for digital currency. The nature of the extent of the revisions remains unclear. What do you think Russia will do with Bitcoin?
Open your free digital wallet here to store your cryptocurrencies in a safe place.
12 Jul
0
Analysts: Winklevoss Bitcoin ETF to pass SEC approval
As the Winklevoss twin’s highly-anticipated, not to mention first of its kind bitcoin exchange traded fund, inches its way towards becoming a reality, ETF analysts are weighing on the likeliness of the fund securing the SEC’s approval.
“I don’t see very much in the way of impediments to it at this point, “everything I see in the Bitcoin filing is by the book so it would be a surprise if they officially deny it. If they pocket veto it and kind of ignore it for a while… that’s a possibility.”
The Winklevoss twins, who have claimed to own as many as 1% of all bitcoins in circulation, recently revealed in their fourth filing since the ETF’s initial proposal that the fund will trade on the NASDAQ under the ‘COIN’ symbol.
The twins’ bitcoin ETF seeks to appeal to investors who want to get in on the digital currency under regulated conditions, which further opens the door to large institutional investors who cannot yet hold bitcoin directly on brokerage statements. Furthermore, the fund hopes to mitigate the risk often associated with storing the digital currency while providing a template for tax reporting.
ETFtrends web editor, Todd Shriber explains:
“If the Bitcoin ETF is classified as a commodity ETF, the rate of tax they’ll be paying will much higher than if they bought a currency ETF.”
ETFtrends.com editor and president of Global Trends Investments, Tom Lydon says that given the twins’ openness about the status of the ETF, which can only go so far due to SEC laws and procedures, the likeness of it securing approval is highly likely:
“I would feel strongly it’s going to happen it may not be as soon as people would hope, I wouldn’t imagine they would continue talking about it and making progress if in fact it would not come to fruition.”
Lydon tells IBT that the largest impediment in terms of acquiring investors will lie in the education of those interested parties. However, thankfully, he adds, “they’re pretty good at explaining what Bitcoin is.”
Open your free digital wallet here to store your cryptocurrencies in a safe place.
9 Jul
0
Polish Finance Ministry says Bitcoin can be used as financial instrument
(CoinDesk) Poland’s deputy finance minister Wojciech Kowalczyk has released a
document confirming that under the country’s existing financial
regulations, bitcoin can be considered a financial instrument.
document confirming that under the country’s existing financial
regulations, bitcoin can be considered a financial instrument.
The statement follows a previous inquiry from Michal Pacholski, an
opposition member of Parliament for the liberal Twoj Ruch (Your
Movement) party. At the time, Pacholski asked Poland’s Ministry of
Finance to explain the legal status of bitcoin transactions.
Specifically, his query focused on whether or not “options and futures
contracts can be considered as a financial instrument” if they are
denominated in a digital currency.
opposition member of Parliament for the liberal Twoj Ruch (Your
Movement) party. At the time, Pacholski asked Poland’s Ministry of
Finance to explain the legal status of bitcoin transactions.
Specifically, his query focused on whether or not “options and futures
contracts can be considered as a financial instrument” if they are
denominated in a digital currency.
The Finance Ministry replied that bitcoin fits within that legal framework, stating:
“Options or futures contracts which are based on
[bitcoin] as a base instrument can be considered as derivative
instruments, and as such, they can be considered as financial
instruments, according to the bill on financial instruments.”
Bitcoin’s legal status clarified
In the notice, Kowalczyk confirmed that bitcoin is not an officially
recognized currency in Poland. He said in the policy document:
recognized currency in Poland. He said in the policy document:
“An analysis of national regulations allows to conclude
that bitcoin … is not a legally defined and universally accepted
currency, because it cannot be classified as either a national currency …
or a foreign currency.”
Previously, Pacholski had pressed the Finance Ministry on the
possibility of issuing options and futures contracts in the form of
derivatives based on bitcoin market indexes. These issuances, he said,
would be similar to the derivatives which are based on stock market
indexes.
possibility of issuing options and futures contracts in the form of
derivatives based on bitcoin market indexes. These issuances, he said,
would be similar to the derivatives which are based on stock market
indexes.
Kowalczyk’s document confirms that these instruments may be made
available to Polish investors. This, the Finance Ministry said, is in
accordance with the country’s banking services regulations.
available to Polish investors. This, the Finance Ministry said, is in
accordance with the country’s banking services regulations.
Regulators accept bitcoin usage
Ultimately, the Polish government statement on bitcoin’s use in
derivatives markets suggests the continued evolution of government
policy toward digital currencies in Poland. While bitcoin can be used as
a medium of exchange and financial tool, it remains unrecognized as a
legal currency by regulators.
derivatives markets suggests the continued evolution of government
policy toward digital currencies in Poland. While bitcoin can be used as
a medium of exchange and financial tool, it remains unrecognized as a
legal currency by regulators.
This policy stance has been stated by Poland’s financial regulators in the past, including officials from the Finance Ministry.
Speaking at a seminar held at the Warsaw School of Economics (SGH) in December,
Szymon Wozniak, a Finance Ministry representative, said that the
ministry does not consider bitcoin to be illegal, but it does not
consider it to be a legal currency either. He remarked:
Szymon Wozniak, a Finance Ministry representative, said that the
ministry does not consider bitcoin to be illegal, but it does not
consider it to be a legal currency either. He remarked:
“What is not forbidden is permitted. However, we certainly cannot consider bitcoin to be a legal currency.”
Open your free digital wallet here to store your cryptocurrencies in a safe place.
7 Jul
0
Virtual and digital currencies can challenge the sovereignty of states
(CoinTelegraph) “Virtual and digital currencies can challenge the sovereignty of states,” says Gareth Murphy, senior Central Bank of Ireland
official. At a recent digital money conference in Dublin, he mentioned
that rivals are interfering with a bank’s ability to sway the price of
credit for the entire economy. Murphy warned that there might be
considerable threat to the finances of a country if increasingly more
transactions for services and goods fade away from the tax system due to
the use of crypto currencies such as Bitcoin. He added:
official. At a recent digital money conference in Dublin, he mentioned
that rivals are interfering with a bank’s ability to sway the price of
credit for the entire economy. Murphy warned that there might be
considerable threat to the finances of a country if increasingly more
transactions for services and goods fade away from the tax system due to
the use of crypto currencies such as Bitcoin. He added:
“Central banks, [out] of necessity, have monopolized the exercise
of these functions. Virtual currencies pose new challenges to central
banks’ control over these important functions.”
Bitfin 2014 is Ireland’s biggest
Bitcoin conference. It gathers the brightest minds in finance,
payments, banking, and business. The goal is to host fearless debates on
the risks and opportunities involved with decentralized currencies.
Bitfin (Bitcoin Finance) wants to shape
the future of corporate strategy, commerce, and economic policy in the
current industry of peer-to-peer digital money. “Bitcoin Finance is the
digital money conference you’ve been waiting for,” the official press
release reads.
Bitcoin conference. It gathers the brightest minds in finance,
payments, banking, and business. The goal is to host fearless debates on
the risks and opportunities involved with decentralized currencies.
Bitfin (Bitcoin Finance) wants to shape
the future of corporate strategy, commerce, and economic policy in the
current industry of peer-to-peer digital money. “Bitcoin Finance is the
digital money conference you’ve been waiting for,” the official press
release reads.
Bitcoin Gaining ground in Ireland
Losing confidence in currencies may lead to uncertainty, which can
trigger significant drops in economic activity. The Central Bank has
constantly emphasized that it doesn’t recognize digital currencies such
as Bitcoin in Ireland. Nonetheless, those who choose to use Bitcoin anyway won’t have consumer protection.
trigger significant drops in economic activity. The Central Bank has
constantly emphasized that it doesn’t recognize digital currencies such
as Bitcoin in Ireland. Nonetheless, those who choose to use Bitcoin anyway won’t have consumer protection.
As the Director of Markets Supervision at the Central Bank, Mr.
Murphy is well aware that virtual currencies could offer a great option
for people looking to buy and sell different services and goods. He
added that in these circumstances, the anti-money laundering rules will
be thoroughly tested. Failure of settlement infrastructure and
payments, or any sort of “financial plumbing,” could have a great impact
on the country’s economic activity and consumer confidence. Murphy
said:
Murphy is well aware that virtual currencies could offer a great option
for people looking to buy and sell different services and goods. He
added that in these circumstances, the anti-money laundering rules will
be thoroughly tested. Failure of settlement infrastructure and
payments, or any sort of “financial plumbing,” could have a great impact
on the country’s economic activity and consumer confidence. Murphy
said:
“In effect, economic activity is the aggregate of domestic
transactions in the ‘euro-denominated economy’ and the ‘virtual currency
economy.’”
Because digital currencies pervade economic activity, major financial
institutions and banks will most likely feel the effects. Other major
financial institutions don’t see Bitcoin as a threat to their
operations. However, in Murphy’s view, these institutions would be
foolish to have this kind of attitude towards the technology,
mentioning:
institutions and banks will most likely feel the effects. Other major
financial institutions don’t see Bitcoin as a threat to their
operations. However, in Murphy’s view, these institutions would be
foolish to have this kind of attitude towards the technology,
mentioning:
“This is likely to have a profound operational impact on these firms and their regulatory risk profile.”
Monetary and economic changes
In today’s hybrid economy, central banks will have to face a lot of
economic challenges. Digital currencies defy the way these institutions
calibrate exchange rates, monetary policy and set price of credit.
Supporting Bitcoin and encouraging its growth would have to be
attentively monitored. Gareth Murphy added:
economic challenges. Digital currencies defy the way these institutions
calibrate exchange rates, monetary policy and set price of credit.
Supporting Bitcoin and encouraging its growth would have to be
attentively monitored. Gareth Murphy added:
“The existence of a ‘euro-denominated economy’ and a ‘virtual
currency economy’ raises the prospect of an internal balance of payments
between two sub-economies where suppliers may prefer one currency over
another as a means of payment (for different goods and services).”
Virtual currencies – a bank’s worst enemy
Most economies function with many different currencies and the USD is
the most frequently used on a global scale. Bitcoin undermines a
central bank’s ability on matters such as economic analysis, data
collection, supervision, policy formation, enforcement and resolution,
so these sort of implications can’t be overlooked.
the most frequently used on a global scale. Bitcoin undermines a
central bank’s ability on matters such as economic analysis, data
collection, supervision, policy formation, enforcement and resolution,
so these sort of implications can’t be overlooked.
As far as regulation is concerned, Murphy suggests that Bitcoin
shouldn’t take things for granted and assume its actions will keep
falling under US and Switzerland regulations. He did mention that
Bitcoin should be used to support indefinite innovations that may come
from a wiser use of the technology:
shouldn’t take things for granted and assume its actions will keep
falling under US and Switzerland regulations. He did mention that
Bitcoin should be used to support indefinite innovations that may come
from a wiser use of the technology:
“We should not presume that current regulations are
future-proof. It is possible that further innovations will mean that
these regulations may no longer apply. This suggests that new
regulations may ultimately be needed which are based on new legal
concepts with a clear scope which must stand the test of time.”
Virtual currencies will soon become a bank’s worst enemy, and that’s
because they’re offering lower fees, commissions, greater convenience
etc. Bitcoin might gain control over the most important functions of
exchange rate and monetary policy. In spite of the currency’s relative
instability, more people are turning their attention to Bitcoin, and the
more publicity it receives the higher chances it has to become
ubiquitous in our everyday lives.
because they’re offering lower fees, commissions, greater convenience
etc. Bitcoin might gain control over the most important functions of
exchange rate and monetary policy. In spite of the currency’s relative
instability, more people are turning their attention to Bitcoin, and the
more publicity it receives the higher chances it has to become
ubiquitous in our everyday lives.
Open your free digital wallet here to store your cryptocurrencies in a safe place.