Bitcoin… Is it a bird? Is it a plane? No, it’s a …. According to the Collins dictionary, Bitcoin is “a system of open source peer-to-peersoftware for the creation and exchange of (payment in) a certain type of cryptocurrency” Transactions of bitcoin are verified and recorded in public distributed ledger called blockchain. Bitcoin is going through an identity crisis! The SEC treats Bitcoin as a security or money. FinCEN treats Bitcoin as currency. The IRS treats Bitcoin as property. The CFTC treats Bitcoin as a commodity. Other regulatory authorities in Europe and Asia also have their own definitions! In your opinion, what is the most appropriate definition and why? Should Bitcoin and other cruptocurrency be regulated? If so, how? What is the difference between digital currency and cryptocurrency? Do you support the idea of a government issued Digital currency? Explain
I think that the most appropriate definition of Bitcoin is the one provided by SEC. This is because essentially Bitcoin is a form of money. The underlying feature of Bitcoin is that it is a kind of electronic cash or a form of cryptocurrency. This essence is captured by SEC’s definition and thus we can say that Bitcoin is primarily a decentralized digital currency which is not backed by a central bank.
Yes, Bitcoin and other cryptocurrency should certainly be regulated. Without regulation there is a high chance of funds being misused by criminals and other negative forces in society. To regulate Bitcoin government should regulate all exchanges so that flow of fiat with regards to all forms of cryptocurrencies is through exchanges. This will ensure that illicit behavior is controlled and that tax is paid on transactions. Secondly government should create a tangible framework for ICOs (i.e. Initial Coin Offering) and let exchanges manage ICOs. Lastly government should establish a working group of block chain experts, economists and policy specialists.
The main difference between a digital currency and a crypto currency is that while digital currencies are centralized cryptocurrencies are decentralized. Secondly digital currency requires user identification while cryptocurrency does not require any user identification. Thirdly there is legal framework associated with digital currencies while for cryptocurrency there is no available legal framework as of now.
Yes, I do support the idea of a government issued digital currency. A government issued digital currency will have sovereign backing as well as backing by the central bank and so the risk element will be negligible. There will be no possibility of transaction manipulation also with regards to a government issued digital currency.
Bitcoin… Is it a bird? Is it a plane? No, it’s a …. According to the...
FISCAL POLICY IN THEORY: March, 2020: we are on the verge of Congress and the President passing legislation that will empower the federal government to spend an unprecedented amount of EXTRA money not seen since World War 2 ---- in order to address the pandemic but also to help cushion the blow financially of perhaps ten or twenty million Americans --- or more --- losing their jobs, and thus suffering a drop in income. The scale of the 2020 recession...