In november I published an analysis of the ECB paper, called "The Gloom of Central Banking"
Here's the pdf:
http://www.scribd.com/doc/112298863/The-Gloom-of-Central-Banking-pdf
Here's the consequent interview on the Max Keiser show:
http://www.youtube.com/watch?v=d5vowdygIPU
Topic: Good news; ECB 2012/10 report on virtual currencies (Read 6787 times)
Ah, a Bitcoin-hater's propaganda piece. You'd at least think they'd get their facts right: BTC1 was worth ~US$33 in June 2011, not 2012!
The anti-bitcoin campaign has begun
http://www.libertariannews.org/2012/11/04/bitcoin-fear-mongering-by-an-mba-school-ranking-website/
http://www.libertariannews.org/2012/11/04/bitcoin-fear-mongering-by-an-mba-school-ranking-website/
Jon Matonis,
Gives a great interview about bitcoin and contributes to the discussion of "defining" bitcoin and identifying how is it distinct from other "electronic" or "digital" currency.
http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/10/31/jon-matonis/bitcoin-crypto-currency-is-digital-gold-the-future-of-money
Gives a great interview about bitcoin and contributes to the discussion of "defining" bitcoin and identifying how is it distinct from other "electronic" or "digital" currency.
http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/10/31/jon-matonis/bitcoin-crypto-currency-is-digital-gold-the-future-of-money
Further discussion of the ECB paper here:
ECB paper on Bitcoin and virtual currencies
- https://bitcointalksearch.org/topic/ecb-paper-on-bitcoin-and-virtual-currencies-121271
ECB paper on Bitcoin and virtual currencies
- https://bitcointalksearch.org/topic/ecb-paper-on-bitcoin-and-virtual-currencies-121271
We published a thorough response on our blog: http://blog.bitinstant.com/blog/2012/10/30/the-ecb-report-on-bitcoin-and-virtual-currencies.html
Yes, it should be a part on a press kit. I wonder if Max Kaiser could do another Bitcoin episode with some European MP's or economists.
What are you doing here, then?
I wouldn't touch Bitcoin with a ten foot pole if I was you...
I guess my world is significantly less black and white than yours. I wouldn't touch Bitcoin with a ten foot pole if I was you...
Yes, it does say the markets are unregulated, but it calls it currency and cash throughout the paper...
Draw your own conclusions.
No thanks, that is too risky when we're talking about legal issues.Draw your own conclusions.
What are you doing here, then?
I wouldn't touch Bitcoin with a ten foot pole if I was you...
Yes, it does say the markets are unregulated, but it calls it currency and cash throughout the paper...
Draw your own conclusions.
No thanks, that is too risky when we're talking about legal issues. Draw your own conclusions.
What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
The paper says very little about how virtual currencies should be treated legally, it only describes how they work and relate to the real world economy.Yes, it does say the markets are unregulated, but it calls it currency and cash throughout the paper...
Draw your own conclusions.
I will read it more thorough later today. The greatest thing about this paper is that it shows how ECB is thinking as a central bank when it faces such a new challenge
For example, they mentioned this:
"In the classical equation of exchange, the velocity of money (V) is represented in the following terms: V = P x Y / M, where P x Y is the
nominal GDP and M is the money supply."
MV=PY is the most simple and sound formula that is taught everywhere in the world's economy school, so central bank's operation actually is consistent with modern economy theories
Currently the EMU is facing big uncertainty, some of the member country might leave it, who knows what's going to happen in such a mess, if bitcoin were picked up by one of the country as backup currency (remember pirate party? they definitely favour BTC), then it will change the landscape
And, virtual economy will sooner or later grow larger than physical economy (For example, I don't want to move to a new house every year due to all the labour involved, but in a good game I'm willing to move to a new top fashioned house every day, this can be only achieved by virtual economy, people's spending on virtual things are growing continuously)
For example, they mentioned this:
"In the classical equation of exchange, the velocity of money (V) is represented in the following terms: V = P x Y / M, where P x Y is the
nominal GDP and M is the money supply."
MV=PY is the most simple and sound formula that is taught everywhere in the world's economy school, so central bank's operation actually is consistent with modern economy theories
Currently the EMU is facing big uncertainty, some of the member country might leave it, who knows what's going to happen in such a mess, if bitcoin were picked up by one of the country as backup currency (remember pirate party? they definitely favour BTC), then it will change the landscape
And, virtual economy will sooner or later grow larger than physical economy (For example, I don't want to move to a new house every year due to all the labour involved, but in a good game I'm willing to move to a new top fashioned house every day, this can be only achieved by virtual economy, people's spending on virtual things are growing continuously)
What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
The paper says very little about how virtual currencies should be treated legally, it only describes how they work and relate to the real world economy. "–– could have a negative impact on the reputation of central banks, assuming the use of such systems
grows considerably and in the event that an incident attracts press coverage, since the public may
perceive the incident as being caused, in part, by a central bank not doing its job properly"
So they do wonder if they are doing a good job ...
grows considerably and in the event that an incident attracts press coverage, since the public may
perceive the incident as being caused, in part, by a central bank not doing its job properly"
So they do wonder if they are doing a good job ...
I don't think they would publish such a paper if they didn't already see Bitcoin as having the potential to become a viable alternative to the current money system. To me it sounds like they're basically announcing: "we know about Bitcoin. If the US keeps debasing the dollar and forcing our hand (forcing the ECB to also print), we will FYU."
They are already claiming Bitcoin as falling within their domain of responsibilities:
Quote
virtual currency schemes:
...
do indeed fall within central banks’ responsibility as a result of characteristics shared with payment systems, which give rise to the need for at least an examination of developments and the provision of an initial assessment.
...
do indeed fall within central banks’ responsibility as a result of characteristics shared with payment systems, which give rise to the need for at least an examination of developments and the provision of an initial assessment.
And the lobbiests have been given a clear message too:
Quote
Although in practical terms virtual currency schemes are only an evolution, from a conceptual
point of view they do present substantial changes when compared to real currencies and payment
systems. Firstly, conventional actors like financial institutions, clearing houses and central banks
are absent from these schemes.
point of view they do present substantial changes when compared to real currencies and payment
systems. Firstly, conventional actors like financial institutions, clearing houses and central banks
are absent from these schemes.
Well, this is a kind of white paper, It's filtered from any political bias. The ECB is not the Commision. Further if the EU makes some laws regarding virtual currencies, the member states will have a saying on how and when to implement them. I would imagine that if Bitcoin is put on any national political debate there will be opposition. It could used politically as "just another currency scheme after the failed Euro" which "our" county doesn't need.
This paper is only worth little as a legal document, but it could be an aid if Bitcoin businesses in the member states get hammered by local lawmakers. The stand a better chance now to take such a case up with the EU court.
The ECB is mainly under German leadership. I don't expect Italian, Greek, Spanish or French authorities to have similar positive views towards Bitcoin domestically , when their economy is under threat.
This paper is only worth little as a legal document, but it could be an aid if Bitcoin businesses in the member states get hammered by local lawmakers. The stand a better chance now to take such a case up with the EU court.
The ECB is mainly under German leadership. I don't expect Italian, Greek, Spanish or French authorities to have similar positive views towards Bitcoin domestically , when their economy is under threat.
"–– could have a negative impact on the reputation of central banks, assuming the use of such systems
grows considerably and in the event that an incident attracts press coverage, since the public may
perceive the incident as being caused, in part, by a central bank not doing its job properly"
So they do wonder if they are doing a good job ...
grows considerably and in the event that an incident attracts press coverage, since the public may
perceive the incident as being caused, in part, by a central bank not doing its job properly"
So they do wonder if they are doing a good job ...
Quote
In electronic money schemes the link between the electronic money and the traditional money
format is preserved and has a legal foundation,[...]
format is preserved and has a legal foundation,[...]
is this the same as saying: electronic money has a fixed exchange rate to fiat currency while virtual currency floats?
Yes. Money has future value. Currency has current value.
What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
What I got from the paper is that taxation is still a grey zone. Have you checked the 2008 reference by Ping Chu? I haven't yet, but certainly will.
What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
+1 This is one of the most important insights to get from this, and not a trivial detail!If i remember right, Mr. Bernanke denied that status even to gold in open testimony to the US Congressman Ron Paul and them...
To me though, it seems impossible that the US Federal Reserve will "just let Bitcoin be", without starting the "War on Virtual Currencies" or something...
What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
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