Bitcoin Forum

Bitcoins join global bank network

Warren Mosler
2012-12-10


http://moslereconomics.com/2012/12/10/bitcoins-join-global-bank-network/

(entire article text)

Been looking at Bitcoins for a while and seems it’s not a currency but a payments system.
For example, a acquaintance of mine who wanted to buy an item arranged with the seller to do it via Bitcoins to ‘save’ on vat taxes.

Say the Bitcoin happened to be valued at $12, the buyer wanted to pay $120 dollars.(Note that the value per se was of no consequence for this transaction.)
What the buyer of the item did was buy 10 Bitcoins for the $120, while simultaneously the seller sold 10 bit coins for $120.

The buyer then then bought the item by transferring his 10 Bitcoins to the seller via the exchange, who ‘delivered’ them to the exchange for his prearranged $120.

Bitcoins facilitate untaxed and anonymous transactions. The value of a Bitcoin is of no particular consequence to the buyer and seller in the case of transactions like this, and will fluctuate as a function of the policies of the exchange management.

And seems the right to ‘operate as a bank’ now officially sanctions this type of activity.

Virtual cash exchange becomes bank
** Bitcoins join global bank network **
A currency exchange that specialises in the virtual currency known as bitcoins has won the right to operate as a bank.

Warren Mosler (born September 18, 1949) is an American economist, president and founder of Mosler Automotive, and co-founder of the Center for Full Employment And Price Stability at the University of Missouri-Kansas City. He briefly ran for President of the United States as a member of the Democratic Party in the 2012 election before dropping out to run for U.S. Senate.

It looks like finally the point is getting across that Bitcoin can be useful no matter what the exchange rate.

That would be describing it as having intrinsic demand then, wouldn't it?  :D

It has final demand, regardless of whether it is accepted for tax payment.

Maybe he now sees the source of value, where this simply aren''t "worthless credits on your computer".

This is quite a bit different take on Bitcoin from him since less than 60 days ago:

Warren Mosler about Bitcoin
 - http://www.youtube.com/watch?v=m_NePQAODv0
 - http://bitcointalk.org/index.php?topic=120087.0

Center for Full Employment And Price Stability

Perhaps he's vain enough to google himself regularly, thus found that thread on this forum, and it motiated him to properly research the Bitcoin topic...?

Bitcoin is not a currency?  ???

the fact that it is still-in-beta cryptographic play money and not officially recognized as money in any jurisdiction in the world.

As bitcoins today are accepted as a means of payment by a multitude of merchants in Sweden as well as abroad bitcoins fulfill the conditions for being classified as a means of payment. Provision of means of payment requires registration according to [some articles of law].

According to bitcoin.se it is now  classified as money in Sweden (http://www.bitcoin.se/2012/12/04/finansinspektionen-klassar-bitcoin-som-betalningsmedel/).

(Translated by me.)

This should mean that bitcoin will now be treated as other currencies with regard to regulation of exchangers, exemption from VAT and other laws about money.

According to bitcoin.se it is now  classified as money in Sweden (http://www.bitcoin.se/2012/12/04/finansinspektionen-klassar-bitcoin-som-betalningsmedel/).

(Translated by me.)

This should mean that bitcoin will now be treated as other currencies with regard to regulation of exchangers, exemption from VAT and other laws about money.