Bitcoin

With individuals all over the world seeing the utility in the low cost of international Bitcoin transfers, some commercial banks want to compete with Bitcoin, according to Kirk Hope, the chief executive officer of the New Zealand Banker’s Association in an e-mailed transcript of an interview with TVNZ television.

If You Can’t Beat ‘Em, Join ‘Em: Banks Looking To Compete With Bitcoin?

With Bitcoin having thrown the fits-and-spasms of history on its head, commercial banks are now taking a route other than straightforward co-option in favor of creating their own virtual money.

With individuals all over the world seeing the utility in the low cost of international Bitcoin transfers, some commercial banks want to compete with Bitcoin, according to Kirk Hope, the chief executive officer of the New Zealand Banker’s Association in an e-mailed transcript of an interview with TVNZ television.

“If it’s not Bitcoin it might be some other type of digital currency that could come into play,” Hope said. .

The currency still faces problems around legitimacy, Hope said. “They are being used to buy things like arms and drugs,” he said. “I suspect tax isn’t being paid on Bitcoin transactions.”

All-in-all, Hope demonstrates an acute lack of understanding about Bitcoin. For instance, he cites that there can only be 21 million bitcoins in existence as a rationale to argue for Bitcoin shortcomings. That “satoshies” can be spent (up to the eighth decimal place) make Bitcoin a potentially very robust exchange unit. He says, “you wouldn’t want to pay $300″ for a cup of coffee, as if he doesn’t understand that a Bitcoin can be subdivided at all.

There are many ways in which Bitcoin could be adopted by the more mainstream banking institutions. Products and services are brought into the payment space all the time. Bitcoin is two products: both the exchange unit and the processing mechanism. This might be intimidating for a company like MasterCard, Visa and banks, but it is a reality that they must adapt to. What they will have to understand that, for many users, Bitcoin’s decentralized manner is one of its primary benefits.

https://www.goldsilverbitcoin.com/commercial-banks-compete-with-bitcoin/

The US Regulatory Vice Closes On Bitcoin

Zero Hedge,

6 May, 2013

Just six weeks after the US Treasury decided enough-was-enough with this upstart non-fiat, non-controlled-by-TPTB currency (and applied money-laundering reglations), US financial regulators are now looking for supervisory control over Bitcoin. As The FT reports, CFTC's Bart Chilton notes "it's not monopoly money - real people have real risk in these instruments," and  that regulating the controversial cyber-currency "is sure something [CFTC] needs to explore." Chilton's remit to regulate this "shadow currency" is predicated on it becoming a basis for derivative contracts as opposed to purely transactional (akin to the monitoring of physical oil transactions that can influence crude futures.) Since the Treasury's March decision, at least three North American companies have had their accounts seized by the banks but while this attempt to control the virtual currency follows the ECB's 'ponzi attack' last year, the 'regulators' may note that, "even if US regulations make it hard for Bitcoin businesses to operate in the US, that doesn’t mean it will make it difficult for people to use Bitcoin as a currency in the US. Bitcoin is a world currency."

Via The FT,

Senior officials at a top US financial regulator are discussing whether Bitcoin, the controversial cyber-currency, might fall under their regulatory remit.

 

Bitcoin “is for sure something we need to explore”, Bart Chilton, one of the five commissioners at the Commodity Futures Trading Commission (CFTC) told the Financial Times. A person familiar with the CFTC’s thinking said that the regulator is “seriously” examining the issue.

 ...

Since the ruling, at least three companies in North America have reported having their business accounts closed by their banks. Bitfloor, a New York-based Bitcoin exchange, said it was shutting down entirely, and it has not yet been able to return funds to customers.

 

“Even if US regulations make it hard for Bitcoin businesses to operate in the US, that doesn’t mean it will make it difficult for people to use Bitcoin as a currency in the US. Bitcoin is a world currency,”

...

CFTC jurisdiction generally does not extend to cash markets unless exchanges list derivatives contracts based on them. For example, the agency monitors physical oil transactions insofar as they influence crude futures traded on the New York Mercantile Exchange.

 ...

“In essence, we’re talking about a type of shadow currency, and there is more than a colourable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction.”