Bitcoin seems to be the name of the “virtual currency game” at the moment. Every other player in the crypto networks directly or indirectly rides the curve of bitcoin market price. Yet it can’t get the attention it needs to enter the mainstream. How so? If we take a look at the history cryptocurrency legality in different countries we might have an in-depth idea about the situation.
Regulation scenario of Bitcoin
Currently, there are almost 10 nations around the world that have strictly banned virtual currency in their economy. Their citizens are prohibited from any kind of bitcoin dealing. They think that lack of regulation on digital currency could harm any community. Then again, if there were regulations, it would have cancelled the true goal of virtual currency invention.
Need of Bitcoin regulation
There are plenty of examples where certain incidents have proved the need of regulatory actions on cryptocurrency. Development of black markets, such as Silk Road and Silk Road 2.0 is just the tip of the icebergs. Terrorist financing would be far easier to process by virtue of crypto network.
Experts believe that inability to infiltrate some of the major economic market in the world might hurt bitcoin establishment issue. In order to gain confidence from the investors they are urging for some regulation at certain extent. This would provide the balance it needs between anonymity and security to earn the trust of the opposing parties. But, how do you regulate something like Bitcoin?
How Bitcoin could be regulated
The increasing number of bitcoin usage and bitcoin community is a concern for governments all over the world. Traditional currency systems are facing their own problems with regulatory issues and all. As an alternative, governments are trying find a way to integrate crypto network features into the protocol.
George Takach, one of the founding members of McCarthy Tetrault LLP, thinks that technological innovations will be legalized within the law very soon. According to his article in a law magazine, cryptocurrency is creating the same vibe as internet did when it came on to the scene. Some of the states in US and in Canada have yet to put any regulatory actions where New York has come up with an ill-prepared solution, BitLicense.
Takach points it out that each community reacts to technological revelation with different approach, but it’s important to figure out the trend before acting on it. Utah introduced a regulation protocol against the Public Key Encryption but the approach was useless at the time as the terms were completely different from the intended target. So, it’s important to carefully determine a set of regulatory actions for bitcoin by evaluating the effects and side-effects on the technology.
One important thing that regulatory department should keep in mind that cryptocurrency network is still in the developing stages. There are lots of rooms for improvements. The use case of bitcoin and blockchain keeps getting bigger and wider every day. The terms may not remain the same in 10 years’ time. The use blockchain technology will not be restricted to keeping bitcoin transaction information anymore. Vast application of the technology will be developed and the regulatory steps should be built with these considerations in mind.