Thursday, June 8, 2017

Bitcoin regulation in the U.S. still in the 'Wild West' stage as each state is passing different laws regarding its use

There are two types of recognized money in the United States... Constitutional money (gold and silver), and whatever Congress determines to be legal tender.  And this means that for the 50 states, they are somewhat limited in what they themselves can deem as money in this new era of cryptocurrencies.

And this is why it will be a very long time before there is a both a standardized acceptance, and a designated universal platform regarding monetary regulation of Bitcoin and other cryptocurrencies.  But for now these digital currencies are functioning in the realm of 'old west' territories where governance came from a local administrator since there has yet to be full guidance given regarding their labeling and use from the Federal government.

Take for example the state of New Hampshire, which on June 7 signed into law the exemption of Bitcoin from their own local monetary transmission regulations.
The governor of New Hampshire has signed a bill into law that exempts digital currency traders from the state's money transmission regulations. 
Public records show that Gov. Chris Sununu signed measure on 2nd June, more than a month after the state's legislature completed work on the bill. The measure was first introduced in January. 
According to the text of the bill, the new rules exempt "persons conducting business using transactions conducted in whole or in part in virtual currency" from the state's money transmitter regulations. 
The newly-signed bill also stands out for what is effectively deregulation for the state's trader community, whereas other states have looked to beef up rules for those who engage in similar activities. As might be expected, the effort was cheered by community members who have called for fewer regulations for those who work with digital currencies like bitcoin. - Coindesk
Or in the state of Vermont from a month ago, which passed a law labeling Bitcoin as 'Permissible Investment', which is a way for the state to skirt around the Constitution since individual states do not have the power to designate something as money or a currency outside the two types outlined at the beginning of this article.
On May 4 the Governor of Vermont, Phil Scott, signed a bill into law that recognizes bitcoin as a “permissible investment” for money transmission operations. Many bitcoin proponents believe the state is becoming an innovative region as Vermont authorities have crafted quite a few bitcoin and blockchain friendly statutes. 
Vermont’s latest amendment clearly defines bitcoin and alternative digital currencies as a “means of stored value that can be a medium of exchange, a unit of account, and store of value. Has an equivalent value in money or acts as a substitute for money and also may be centralized or decentralized.” 
As far as virtual currencies are concerned “permissible investments shall be held in trust for the benefit for the purchasers and holders of the licensee’s outstanding payment instruments and stored value obligations,” explains Vermont bill 182. - Bitcoin
Unlike Japan, which has all of its monetary statutes determined at the central government level, the United States is made up of 50 semi-autonomous and semi-sovereign territories that have some, but mostly limited, powers in designating monetary policies within their own borders.  But once a transaction occurs across state lines, then instantly the monetary oversight of that transaction falls under the authority of the Federal government.

And until Congress sees fit to make a law or determination on the use of cryptocurrencies as money or legal tender, then use of Bitcoin and their brother cryptos will remain a sort of 'black market' industry, and the ability for a critical mass of individuals and businesses accepting it as money will remain on the fringe of society.


Post a Comment