Bitcoin regulations may be on the way as the US Senate Banking Committee is scheduled to meet with top market regulators in February over cr...
Bitcoin regulations may be on the way as the US Senate Banking Committee is scheduled to meet with top market regulators in February over cryptocurrency.
The noose may be tightening around Bitcoin and its digital brethren in the United States in the coming months. According to Reuters, the Senate Banking Committee will be meeting with some top financial regulators in early February. Their topic of concern – cryptocurrency.
Are Regulations Coming?
Right now, there are no federal regulators that oversee cryptocurrency within the US. The government (and most importantly, the IRS) view crypto as property that’s subject to capital gains taxes.
However, this may change in the future. The Senate Banking Committee will be talking to Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo and Securities and Exchange Commission (SEC) Chairman Jay Clayton to discuss Bitcoin and other cryptocurrencies, along with any risks that crypto trading can bring to the public.
Will this meeting lead to future Bitcoin regulations? My magic 8-ball says that it’s a distinct possibility.
Governments Yearn for Control
The reality is that the CFTC and SEC have been staking out some jurisdiction over crypto. The CFTC did allow both CME and CBOE to begin listing Bitcoin futures contraacts last month. However, they are now reviewing their process for this after receiving some criticism.
It should be noted that both the SEC and CFTC have issued warnings about the volatility of cryptocurrency and that they may not be able to protect investors from crypto scam artists. There are always those looking to earn some ill-gotten gains by using crypto as the lure. Case in point is BitConnect, who were shut down by the state of Texas over their claims of monetary rewards.
Yet any time government committees get together, it should be a cause for concern. The reality is that any national government will not be too friendly with an economic system that lies outside of their control. To that end, you can bet that regulations are at the forefront of every senator’s mind when that meeting rolls around.
Of course, one of the chief draws for cryptocurrency is its lack of centralization and regulation. Many view virtual currency as an expression of economic freedom, but governments look at crypto in a different light: something to control and to tax.
Shidan Gouran, president of Global Blockchain Technologies Corp. summed up the thought that one of the reasons why cryptocurrency was so valuable was due to a lack of regulation. He said:
We believe that the greatest threat is regulation. Several governments across the world have clamped down on exchanges, some halting trading altogether. Others have gone on to outright ban the use of Bitcoin. Sudden government actions in major Bitcoin trading hubs stand to disrupt the market, with the potential to severely affect the utility of bitcoin — and accordingly, the value.
Are you worried that the upcoming Senate Banking Committee meeting will lay the cornerstone for increased Bitcoin regulation? Let us know in the comments below.
Images courtesy of Pixabay, Wikimedia Commons, and Bitcoinist archives.
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