Is it money or is it not? That is the question. Should states take individual actions to regulate that which they have nothing to do with?
New York State, under pressure from the big banks and stock brokerages, are ready to hold hearings into trying to regulate a digital currency. After doing such a knock down job in keeping value in the US dollar bankers are clamoring for a way to get their dirty fists into BitCoin.
What are their reasons?
BitCoin exchanges have mostly evaded the money transmission regulations that banks and other currency exchanges are required to uphold.
Let’s for a minute define “BitCoin exchanges” as sites, persons, or companies offering services to hold your BitCoin for you, like a bank, and perhaps pay out for you. This is counter to the idea of BitCoin and your personal wallet. Once you trust someone else to hold your valuables you are liable to their ideas and actions, something few BitCoin people want or do. Fraud is something to guard against and perhaps it would be better if such exchanges did not exist and if they do let governments do what they want to them.
If they want to define all exchanges of bit coins between holders then we have a problem. These are private transactions using a unit of value agreed upon by two or more people and government should not be in the middle making decisions or taxing for that.
“Regulation is a necessary step towards bringing BitCoin into the mainstream and avoiding large-scale fraud within the community, like the million-dollar TradeFortress heist that occurred earlier this month.”
The Department of Finance put it, “it is in the long-term interest of the virtual currency industry to put in place appropriate guardrails that protect consumers, root out illegal activity, and safeguard our national security.”
This is the only real reason governments are attacking digital currencies. They want to control the money laundering business them selves. After all it was laundering of drug money that saved the USA in the 2008 market crash and the billions in government “fines” handed out to happy bankers who profited in the trillions from illegal activity.
Safeguard our national security? Well, it is true that the national security hinges on some kind of perceived value in the dollar. But with years of dilution the dollar is pretty worthless now and it can be seen when you realize things are not getting expensive, the dollar is worth so much less now it cannot purchase hardly anything. How can anyone put a real value on a dollar when there are some 15 times more in circulation than 5 years ago?
It is quite obvious that the regulations on bankers and security exchanges have done nothing to “place appropriate guardrails that protect consumers, root out illegal activity, and safeguard our national security.” One only has to look at the fines banks are happy to pay for all their criminal activity.
When you add to that regulatory officials are merely bankers and investment house executive on swinging door jobs their step into the digital currency world will only put layers of payoffs, bribes and corruption in the exchange of a currency they cannot touch.
With the moves of Germany and China that have brought the currency into national circulation without such regulation it will be a tough road to control BitCoin. Adding to that only 2% of BitCoin is traded in the USA and while the empirical government may want a piece of the action it will need to add virtual drones to do so.