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In the U.S., New York has been one of the most bitcoin-forward states. Its lawmakers entertain audiences with people such as the Winklevoss twins who would like to see bitcoin accepted as mainstream currency, and many New York-based businesses have gotten on board with the virtual currency’s use as tender for items as pedestrian as sandwiches.
The Winklevoss twins — Silicon Valley-based technology entrepreneurs — have filed forms with the U.S. Securities and Exchange Commission to launch the first bitcoin exchange traded fund (ETF) on the NASDAQ stock exchange. New York is now proposing a licensing plan for bitcoin businesses that would require businesses that deal with bitcoin to maintain certain levels of capital, compliance, and special licenses.
VISUAL CONTEXT: BITCOIN’S VALUE FLUCTUATION IN ONE DAY IN 2014
Source: Coindesk
Compliance is going to be a huge component for companies that deal with bitcoin — especially as regulation comes through, whether from the SEC or statewide financial regulators. CNN Money quotes Benjamin Lawsky, superintendent of the New York state Department of Financial services:
My hope is that the companies that can meet these rules will give consumers a lot of confidence when they do business with these companies, and that will help those companies thrive and succeed.
Companies would have to provide safeguards for consumers, transaction receipts, disclosures about risks, and policies to handle customer complaints. Basically, everything that most companies have to worry about, except they will be more closely-scrutinized because of the nature of their central tender. But even as New York advances on proposals for bitcoin-based trade, other countries are befuddled as to how to proceed on accepting (or not) the use of the virtual currency.
While Europol warns of bitcoin’s use in illegal markets, Denmark embraces the currency. Asia-Pacific countries including China and Japan have banned its use in certain financial institutions and declared it void as a currency, respectively. Indeed, the currency’s volatility is nothing to take lightly should you be an interested investor. Its trading forums have experienced outages — as any other website is wont to suffer — and thusly its value has fluctuated wildly over the last year or so. But as New york edges closer to bitlicense — the regulations aimed at businesses that receive, exchange, transmit or store virtual currency on behalf of customers — perhaps the closer scrutiny will allow for more reliable trade. At least, that is likely what the Winklevoss twins are hoping for.
