The regulation of the Bitcoin as a topic in the G20

The Bitcoin is the actual hot topic in the financial world. The craze around it is so important that it doesn’t fail to alarm governments such as France’s. They actually didn’t hide their intention to bring the subject on during the next G20 summit that will take place in Bueno Aires in the month of April. Bruno Le Maire, the actual Minister of Economy, states that some decisions has to be taken  before it is too late to act.

G20

It’s a very volatile asset

The Minister was concern about how it could be a danger for the buyers. The price is actually very volatile, and since it’s a financial asset like we never have seen before, i.e. not linked to any country or asset with intrinsic value such as gold, its future is unpredictable. It’s mostly an opportunity for those who trade the cryptocurrency on a short term, otherwise it’s a very bad idea to invest in it at the moment.

The trend is actually keep on going upward, as the $20 000 milestone has been reached in the middle of December. But for now, no one can predict if or when the market is going to drop to historic lows like every previous economic bubble. There’s also the possibility that it would reach a point where the Bitcoin value remain steady for a sustainable period, but nothing still allows us to presume that.

The problem of users’ anonymity

The French Minister of Economy is also worried about how it can be used in a malevolent way. Since it is untraceable, it’s possible for criminals and terrorists to transfer money from each other without being caught by the authorities. It has already been discussed among European countries, as how to prevent an illegal use of this cryptocurrency such as money laundering. It was agreed that a better regulation of the Bitcoin would help to fight these misuses of the currency.

The user’s anonymity has been mentioned several times as the core of the issue. Indeed, since you can’t tell who is doing what with their bitcoins, there’s no way to identify the illegal users from regular ones. Thus, an abrogation of such anonymity is actually the best solution to regulate the use of The Bitcoins. However, it might not be that easy to do; first of all, every country concerned by the Bitcoin should agree on such abrogation for it to be effective.

If the use of Bitcoin in total anonymity is forbidden on a country, most of the transactions would just have to take place in countries in which it is allowed if the user wants to remain unknown. The Bitcoin exchange platforms can also ask their users to reveal their identities in order to be allowed the access of their services. Still, it’s a tough battle for every concerned government to regulate the use of this currency.

It’s still not recognized as a currency

If everyone in the world is amazed by the ascension of the Bitcoin and other cryptocurrencies, most of governments doesn’t even consider them as currencies in the first place. The fact is that Bitcoin and its peer don’t meet most of the criteria to be perceived as a currency. Its value doesn’t rely on a country or an intrinsic asset, only on the value accorded to the blockchain. Some countries even consider it as dangerous, and it is banned from places such as Bolivia or Morocco.

François Villeroy de Galhau, the director of the French National Bank, stated that it definitely shouldn’t definitely be considered as money. But it’s nonetheless a risky asset that we need to keep an eye on. It already has started in some country, such as Japan, but such initiative is still too rare to have a consistent impact on the cryptocurrency.

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