Bitcoin is very quickly beginning to take over the world after a dramatic disappearance in 2014 after the collapse of the Bitcoin exchange Mt Gox – which was said to be as dramatic as the Lehman Brothers collapse. While Bitcoin is an all-round legal currency, after the Tokyo-based currency exchange collapse stung Japan, the country have turned to a new legislation which was implemented earlier this month, in order to protect users from collapse and also to help comply with money-laundering regulations. In addition to this, the legislation led to an official authorisation of Bitcoin as a ‘normal’ currency in the country. It is this regulatory framework implemented by Japan that could have a huge impact around the world, as we begin to see more and more frameworks pop up as a result.
One of the major benefits of Bitcoin is that it is a decentralised currency and because of this many countries, while accepting Bitcoin, have a confusing legal status on the crypto currency. However, with some people believing that Bitcoin struggles with insufficient regulations due to the currency being treated as ‘private money’, we could see the Bitcoin beginning to become far more strictly regulated and more centralised. While this goes against the whole idea of the crypto currency, which prides itself on its anonymity and privacy, while stopping any of the currency from being seized for legal reasons or dealing with legal jurisdictions like gambling laws, it may become a necessity. Currently, many countries such as the UK are not enforcing anti-money laundering regulations on the Bitcoin currency, but with Japan taking the first step towards this, we could see many countries following suit.
Europol’s Stance On Bitcoin
While the US has one of the highest number of Bitcoin users in the world mainly due to population size, Europe is very close behind, with many of the countries already having Bitcoin ATMs and more accessible to the public. Europol, who are the EU’s law enforcement agency, are very critical of the Bitcoin because of its anonymity, but this is often a misunderstood element of the crypto currency. While there is no way to tell who controls the Bitcoin wallets, in order to maintain privacy values of the currency, it is possible to track every stage of the transfer of a Bitcoin to see exactly where it has been.
Uncertainty About The Bitcoin
Because of the difference in the way that governments and regulators classify Bitcoin, it will be difficult to regulate it as a whole throughout the globe. For example, some countries define Bitcoin as a form of money, others define it as a commodity and others are still treating it as the ‘unknown’ which ultimately blurs the lines in how it can be taxed and therefore regulated. However, there have still been a huge number of Bitcoin casinos that have surfaced online, showing how quickly the online gaming and gambling community have accepted this crypto currency – despite some uncertainty about whether or not the Bitcoin should be considered a currency.
In March 2017, China implemented a new circular which required Bitcoin exchanges to implement a number of processes as part of a regulation. According to sources, these regulations are similar to the ones that are applicable to banking institutions in the country, and they have also previously frozen withdrawals from exchanges, showing how much more regulated the Bitcoin is in the country. In addition to this, in April 2017, some Chinese documents were leaked which showed rectification