Since BitLicense regulations wreaked havoc in New York causing Bitcoin businesses to leave the region in droves, another Bitcoin bill has been introduced as nation-wide regulation looms.
‘Pro-Bitcoin’ Bill Introduced in House
This week, a U.S. House resolution, H.R. 835, was introduced to Congress as a so-called “pro-Bitcoin” regulatory policy. Representatives Adam Kinzinger and Tony Cardenas initiated the resolution, which gives mention to Bitcoin-like currencies and blockchain technology.
The proposed bill states in its preamble:
Whereas emerging payment options, including alternative non-fiat currencies, are leveraging technology to improve security through increased transparency and verifiable trust mechanisms to supplant decades-old payment technology deployed by traditional financial institutions; and whereas blockchain technology with the appropriate protections has the potential to fundamentally change the manner in which trust and security are established in online transactions through various potential applications in sectors including financial services, payments, health care, energy, property management, and intellectual property management.
Coin Center’s Jerry Brito notes that this resolution, if passed, will only will represent a victory for the bill in the House. The U.S. Senate will have to deliberate on it as well. Brito states that this is a good way for the House to set forth initiatives on the subject of cryptocurrencies and blockchain technology. He believes the U.S. federal government should “adopt policies that encourage blockchain innovations to flourish.”
States Moving Towards Cryptocurrency Regulations
Since the introduction of the BitLicense in New York, states across the U.S. have inched slowly towards defining and regulating cryptocurrency.
For instance, at the request of Governor John A. Kitzhaber, M.D., for Department of Consumer and Business Services, Oregon passed a law that governs Bitcoin exchanges and money transmission services.
The state of California introduced legislation last year Bill AB -1326, which was flagged by certain think-tanks such as the Taskforce and the Electronic Frontier Foundation (EFF), for stagnating innovation and violating privacy. On top of these complaints, Bill AB -1326 required business participants to pay a fee of $5,000 per application. This bill has been inactive since it was first introduced.
Bitcoin.com recently reported on new cryptocurrency legislation passed into law by North Carolina authorities, called the “Money Transmitters Act.” The policy, signed into law by Governor Pat McCrory, on July 6 defines virtual currencies as “permissible investments.”
With this new position on cryptocurrency, Coin Center’s Jerry Brito felt the definitions were not broad enough and had a few criticisms towards the North Carolina law. However, the Chamber of Digital Commerce, another blockchain and digital currency advocacy group, praised the law and noted that they took part in developing its framework.
Several other states are moving in the same regulatory direction towards virtual currencies. This includes South Dakota, Kansas, Texas, Vermont, Pennsylvania, Nebraska, Virginia, Kentucky, Maine, and Colorado. The Chamber of Digital Commerce added that they are working with these other states to define and regulate cryptocurrency.
Compliant Bitcoin Businesses are Being Snubbed
With all these new policies being discussed by state officials individual cryptocurrency businesses are being ostracized on social media forums, most notably Coinbase and Circle Financial. There have been a lot of threads complaining about Coinbase ceasing its services to those who use their Bitcoin on gambling sites.
One particular post on the subreddit r/bitcoin forum says people shouldn’t blame these businesses but rather blame state authorities and so-called advocacy groups such as the Chamber of Digital Commerce and Coin Center. The thread starter says that these organizations are the real enemies of Bitcoin and companies have to comply with the rules or otherwise shut down their services. The subreddit post states:
Companies in this space don’t freeze money, block accounts or trace spending because the leadership has lots of spare time or because they have puritanical ideas about what people should buy. In almost all cases, the companies are doing what they do because they are governed by many regulations and they are in fear of even more. Next time you are mad at this exchange or that one for blocking an account. Place blame where blame is due: the regulators who cause these issues. BETTER YET place blame with the industry groups who proactively ASK FOR MORE REGULATION while claiming to represent this industry. As we speak, we have people knocking on doors of lawmakers, claiming they represent us, while asking for MORE new regulations. These folks are the enemy, not the companies forced to comply with the mess they create.
There are some Bitcoiners who welcome regulation as they feel it will boost cryptocurrency as legitimate and also may curb scammers and fraud. On the other hand, there are many who believe governments need to keep their hands off the technology as officials have been known to be corrupt, imposing onerous taxes, and stifling innovation. These Bitcoin users believe that advocacy groups working with government are the true enemies.
There’s no doubt that laws and regulations will continue to appear throughout the cryptocurrency and blockchain industry. However, the U.S. should take note of other countries leading the pack in the Bitcoin industry without enforcing stifling regulations.
For instance, Switzerland recently proposed to reduce regulation so cryptocurrency businesses can thrive. Meanwhile, Bitcoin businesses have been thriving in many unregulated regions of the world. Thus, while the U.S. is the current leader in technological innovation, increased regulation could relegate it and force businesses to go elsewhere.
What do you think about regulation and Bitcoin? Let us know in the comments below.
Images courtesy of Pixabay, Coin Center’s Website, Chamber of Digital Commerce Website, and Crypto-Graphics.com