Bitcoin has long been the subject of various articles in the past few months especially by experts who have interest in digital money and cryptocurrency. Along with the increasing popularity of bitcoins as an innovative means to pay and receive money in different transactions, there arise certain concerns regarding its security and credibility. But according to Google Analysts, despite these concerns, bitcoin still has the potential to be “the Internet of money”. If bitcoins are properly regulated, it could offer an efficient and productive system to connect businesses, investors and consumers through the use of digital currency.
A Regulatory Approach
Andy Yee, an analyst working for Google’s Asia-Pacific Division, mentioned in an interview which was released in the article, Internet Policy Review, stressed the importance of regulating digital currencies and to have these regulations work for current digital frameworks. In advocating the need for the right regulations, experts also emphasize the need to allow innovation and at the same time address the concerns of consumers, agencies and regulators.
Striking a Balance
Eversince bitcoin was introduced way back in 2009, it has continued to grow and prosper both as a digital currency and a peer to peer payment system. As an open source platform, safety and security concerns need to be addressed to protect consumers. Politicians agree that despite the bitcoin being an open source platform without governing laws, there is a pressing need to set legal boundaries especially since bitcoin as a digital currency has also been volatile exhibiting fluctuations brought about by speculations and low volumes of payment.
In this regard, both parties agree that bitcoin should be regulated. What experts suggest is that any proposed set of rules and regulations should focus on services that handle the people’s money instead of those people developing cryptocurrency software. Striking a balance is essential to allow companies and businesses to thrive in the bitcoin ecosystem. Furthermore, Yee added that just like the rules and regulations for financial institutions and companies, these rules could be used just the same in order to regulate bitcoin. The general applicability in theory can be applied to emerging companies in the bitcoin economy. Finding a happy medium will give incentive to merchants and businesses while at the same time addressing concerns and protecting the welfare of consumers make the bitcoin system to work in its maximum potential as the Internet of money.
Legal Framework Anchored on an Adaptive Approach
Bitcoin like other open source software is also prone to abuse and misuse of some people. In the global narcotics market and even in other illegal activities, bitcoin is widely used. Criminals take advantage of the fact that bitcoin is pseudonymous transaction network. In providing legal framework to regulate bitcoin transactions and activities, analysts believed that legal boundaries should be anchored on adaptive approach to deter illegal activities without hampering the innovation of bitcoin network and system. Those who would use bitcoin for illicit activities have to go through intermediaries to detect and deter any illicit activity.
