A panel of bitcoin and legal experts discussed the hot topic of regulation and digital currency today at the Bitcoin London conference.
The panel discussion, which was moderated by Stefan Greiner of Xenion Legal, featured Constance Choi of Payward, Patrick Murck of Bitcoin Foundation, Stuart Hoegner of Gaming Counsel and attorney Danny Friedberg.
Greiner kicked off the discussion by warning members of the audience not to expect any concrete answers about the future of digital currency’s regulation – the landscape is currently moving, which is likely to remain the case for a while.
Speaking first about regulation in the US, Murck said the Commodity Futures Trading Commission (CFTC) has been “making a lot of noise” about digital currency recently, stating their aim is to ensure the protection of consumers.
He noted California and other states have started to crack down on bitcoin companies recently, even though it is not clear which legislation, if any, the currency falls under. He added that the Bitcoin Foundation has, today, issued its response to the cease and desist order it received recently.
Some bitcoin supporters fear aggressive attempts at regulation, such as the cease and desist orders, will have a negative effect on bitcoin as they will frighten consumers. However, Choi believes the attempts at regulation by the US treasury have merely served to “propel bitcoin from the shadows”.
She went on to say Payward and the Bitcoin Foundation have been in talks about forming a coalition – a kind of self-regulating organisation – that has, so far, been given the full blessing of the treasury.
Murck said it could be the case that the industry is left having to prove its innocence, rather than regulators having to prove the industry is doing something wrong. He added this would be bad for consumers and bitcoin businesses in the US, but offers those in other countries the opportunity to take the lead in the digital currency industry.
Toronto-based Hoegner said the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) recently published statements relating to digital currencies that, in a nutshell, suggest bitcoin transactions do not fall under current legislation.
He added, however, that he thinks the rules will change in the future: “There’s a window [of no regulation], but I don’t know how long this will be open.”
Choi said there seems to be a much more “reasoned” approach to regulation in Europe than there is in the US, with Greiner adding the European Central Bank’s analysis of bitcoin found it was not e-money, so it does not currently fall under regulation.
The same goes for Australia – bitcoin doesn’t currently fall under the Australian Transaction Reports and Analysis Centre’s laws on e-currency.
Murck said he was “heartened” by the amount of conversation that has taken place with regulators across the world – the mere fact they are willing to discuss it at all gives it strength and credibility, he added.
He said now is the time for the bitcoin community to come together and discuss what they could be flexible on and what they simply will not budge on. If willingness to compromise is displayed, governments may be willing to ease back on future regulation.
Murck believes now could also be the time to engage in further talks with the banks: “You can make your best friends over common enemies.”
What are your predictions for bitcoin regulation?