Topic: ECB paper on Bitcoin and virtual currencies - page 10. (Read 16899 times)
I guarantee you that distinction will not matter to the US Government won't. If a digital currency can be used as a "stored value" or as "prepaid" asset, believe me they'll regulate it.
very well written especially then making a point about separating the term electronic money from the term virtual currency.
if you did not already know electronic money is displayed as the FIAT amount using FIAT symbol so it remains regulated as it clearly represents a FIAT equivelent EG paypal balances. where as virtual currency can be points, credits or crypto that does not look anything like a FIAT balance.
as long as the AML/KYC stick to their electronic money and paper FIAT and leave virtual currencies to fend for themselves and adopt their own best practices it will all be good.
if you did not already know electronic money is displayed as the FIAT amount using FIAT symbol so it remains regulated as it clearly represents a FIAT equivelent EG paypal balances. where as virtual currency can be points, credits or crypto that does not look anything like a FIAT balance.
as long as the AML/KYC stick to their electronic money and paper FIAT and leave virtual currencies to fend for themselves and adopt their own best practices it will all be good.
Oh wow that's a great point. I actually used their definitions against them trying to make the case that they admit that apart from electronic money's physical counterparts being legal tender there's no difference between fiat currencies and bitcoins. But now I actually think it's better for us if there is a difference and we adopt their distinction because it absolves us of the current laws regulating electronic money.
Thank you!
very well written especially then making a point about separating the term electronic money from the term virtual currency.
if you did not already know electronic money is displayed as the FIAT amount using FIAT symbol so it remains regulated as it clearly represents a FIAT equivelent EG paypal balances. where as virtual currency can be points, credits or crypto that does not look anything like a FIAT balance.
as long as the AML/KYC stick to their electronic money and paper FIAT and leave virtual currencies to fend for themselves and adopt their own best practices it will all be good.
if you did not already know electronic money is displayed as the FIAT amount using FIAT symbol so it remains regulated as it clearly represents a FIAT equivelent EG paypal balances. where as virtual currency can be points, credits or crypto that does not look anything like a FIAT balance.
as long as the AML/KYC stick to their electronic money and paper FIAT and leave virtual currencies to fend for themselves and adopt their own best practices it will all be good.
Oh wow that's a great point. I actually used their definitions against them trying to make the case that they admit that apart from electronic money's physical counterparts being legal tender there's no difference between fiat currencies and bitcoins. But now I actually think it's better for us if there is a difference and we adopt their distinction because it absolves us of the current laws regulating electronic money.
Devils-advocate here... a reserve could in fact be setup, it's just more difficult and more costly in Bitcoin, essentially if european central banks were to buy up say 30%+ of all bitcoins that were ever to be made and establish a fixed buy/sell rate between the Euro and bitcoin you would have a fully functioning reserve, but the act of acquiring said amount of bitcoin would be particularly costly,
Don't see it particurarly costly for a central bank: 30% of every mined bitcoin at today is near 25 Milion euro, 0.005% of the 526 billion of total reserve of the ECB. Even if the bitcoin value jumps of a 100X for that is still only the 0.5%
But people can simply just accept REAL Bitcoins and not other currency. It was easier with gold since nobody likes to carry heavy stuff around. With Bitcoins, that's not the case.
True, but what you described even happened with Gold, and a significant reason why the USD dropped the Gold standard as it saw its Gold reserves being depleted at record pace. In the end the ultimate goal is price fixing (illegal for the common man, common practice for big gov) and that is within the realm of power for this size of an institution and even easier in collaboration with comparable entities (i.e. US and EUR).
very well written especially then making a point about separating the term electronic money from the term virtual currency.
if you did not already know electronic money is displayed as the FIAT amount using FIAT symbol so it remains regulated as it clearly represents a FIAT equivelent EG paypal balances. where as virtual currency can be points, credits or crypto that does not look anything like a FIAT balance.
as long as the AML/KYC stick to their electronic money and paper FIAT and leave virtual currencies to fend for themselves and adopt their own best practices it will all be good.
if you did not already know electronic money is displayed as the FIAT amount using FIAT symbol so it remains regulated as it clearly represents a FIAT equivelent EG paypal balances. where as virtual currency can be points, credits or crypto that does not look anything like a FIAT balance.
as long as the AML/KYC stick to their electronic money and paper FIAT and leave virtual currencies to fend for themselves and adopt their own best practices it will all be good.
But people can simply just accept REAL Bitcoins and not other currency. It was easier with gold since nobody likes to carry heavy stuff around. With Bitcoins, that's not the case.
That said, I think there are some misleading points. Most obviously, they do not understand how consensus works in the bitcoin system. This leads to some significant misunderstandings. For example, imposition of a reserve requirement makes no sense where there is no central issuer and no semi-centralized financial system. You can't make every user back 10% of his bitcoin with Euros. Hell, you don't even know who the users are!
Devils-advocate here... a reserve could in fact be setup, it's just more difficult and more costly in Bitcoin, essentially if european central banks were to buy up say 30%+ of all bitcoins that were ever to be made and establish a fixed buy/sell rate between the Euro and bitcoin you would have a fully functioning reserve, but the act of acquiring said amount of bitcoin would be particularly costly, however on the flipside the systems, people and property needed to administer it would likely be considerably cheaper than the current reserve system infrastructure. The optimal approach to this would be to quietly over a longer period of time establish this system and be the first to do it. With all that said the costly part at current impact is nowhere near being much of a blink of an eye for this level of financial entity.
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This is a well-written and balanced account of bitcoin.
I agree. It is well documented as well. Looking at the references is an interesting exercise.Quote
It is a policy brief, not an academic paper.
I stand corrected.Quote
I'm anticipating that this will be misinterpreted to mean future action by the ECB. It very clearly refers to future action by law enforcement, not monetary authorities.
Sure, the ECB is not an enforcement agency, but they do have a lot of clout... someone else will do the regulating..
Personally I see this kind of attention from the ECB more significant than a lot of major media mentions.
This:
http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf
Means that the central bankers are paying attention now. This sort of academic paper normally precedes attempts to regulate. It also include the potential excuses that they will use to do so.
We have been warned.
http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf
Means that the central bankers are paying attention now. This sort of academic paper normally precedes attempts to regulate. It also include the potential excuses that they will use to do so.
We have been warned.
This is a well-written and balanced account of bitcoin. It is a policy brief, not an academic paper. The ECB clearly calls for 'wait and see' and not regulation. Barring a very dramatic expansion in usage (e.g. 50-fold rise in price), the ECB will do nothing at all in the near future. I hope that people pay attention to the ideas presented in the paper and not just the identity of the author.
That said, I think there are some misleading points. Most obviously, they do not understand how consensus works in the bitcoin system. This leads to some significant misunderstandings. For example, imposition of a reserve requirement makes no sense where there is no central issuer and no semi-centralized financial system. You can't make every user back 10% of his bitcoin with Euros. Hell, you don't even know who the users are!
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Further action from other authorities can reasonably be expected in the near future.
I'm anticipating that this will be misinterpreted to mean future action by the ECB. It very clearly refers to future action by law enforcement, not monetary authorities.
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All these issues raise serious concerns regarding the legal status and security of the system, as well
as the finality and irrevocability of the transactions, in a system which is not subject to any kind of
public oversight. In June 2011 two US senators, Charles Schumer and Joe Manchin, wrote to the
Attorney General and to the Administrator of the Drug Enforcement Administration expressing
their worries about Bitcoin and its use for illegal purposes. Mr Andresen was also asked to give a
presentation to the CIA about this virtual currency scheme. Further action from other authorities
can reasonably be expected in the near future.
as the finality and irrevocability of the transactions, in a system which is not subject to any kind of
public oversight. In June 2011 two US senators, Charles Schumer and Joe Manchin, wrote to the
Attorney General and to the Administrator of the Drug Enforcement Administration expressing
their worries about Bitcoin and its use for illegal purposes. Mr Andresen was also asked to give a
presentation to the CIA about this virtual currency scheme. Further action from other authorities
can reasonably be expected in the near future.
Oh well, nothing new then.
http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf
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The following ideas are generally shared by Bitcoin and its supporters:
– They see Bitcoin as a good starting point to end the monopoly central banks have in the
issuance of money.
– They strongly criticise the current fractional-reserve banking system whereby banks can
extend their credit supply above their actual reserves and, simultaneously, depositors can
withdraw their funds in their current accounts at any time.
– The scheme is inspired by the former gold standard.
– They see Bitcoin as a good starting point to end the monopoly central banks have in the
issuance of money.
– They strongly criticise the current fractional-reserve banking system whereby banks can
extend their credit supply above their actual reserves and, simultaneously, depositors can
withdraw their funds in their current accounts at any time.
– The scheme is inspired by the former gold standard.
This:
http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf
Means that the central bankers are paying attention now. This sort of academic paper normally precedes attempts to regulate. It also include the potential excuses that they will use to do so.
We have been warned.
http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf
Means that the central bankers are paying attention now. This sort of academic paper normally precedes attempts to regulate. It also include the potential excuses that they will use to do so.
We have been warned.
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