Bitcoin Forum

Let's assume, a new Exchange was being setup to work WITH governments, anti-money laundering laws and everything.

Some questions:

1. Would govt's (like the US), still want to shut it down because of opposition to bitcoin?
2. If they did want to shut it down, how would they do it if the exchange was actually LEGAL?
3. Assuming the govts of the world 'would' be happy to work with an exchange, how would an exchange actually go about being 'legal', and be able to accept ALL currencies with no issues from all the worlds govts? Is it even possible?

Just thinking out loud and interested to hear ideas/thoughs.

Bigdude

Yes, it is possible to set up a legal currency exchange. There are plenty of them everywhere or else the global economy would stop. Also, you would only need to comply with th laws in your country of business as well as any international laws. As to getting the government to play along. Some lobbyists and positive media coverag goes a long way. If they hate your guts theres plenty of ways. New laws, old laws, very very old laws. Police powers, emergency powers, patriot act, out of country detention centers, you know, the usual.

1. Yes, the politicians and bankers would still want to shut down crypto-currency exchanges.  Money laundering, terrorist funding, tax evasion, and drug trafficking are just excuses they use to try to scare people away from crypto-currencies and to justify more regulations.  The real reason they want to limit access to free market currencies is because they don't want to lose all of the benefits that they currently have with their monopoly control over currencies.
2. They would try to change the laws and make it illegal.  By regulating exchanges they think that they will be able to prevent an exodus out of fiat and into free market currencies.
3. Not possible with a currency like Bitcoin.  Politicians and bankers may start introducing their own crypto-currencies that they have control over, and permit them to be traded on exchanges, but they would not approve of currencies that don't meet their outlandish requirements or benefit them.  Bitcoin is simply incompatible with the current political and banking paradigms.  It's probably just a matter of time before they shut down the current Bitcoin exchanges.  Developers are currently working on decentralized peer-to-peer Bitcoin exchanges which will hopefully be able to successfully counter this threat.

In short yes, a lot of the US governments power internationally relies on their ability to manipulate the USD at will for their own purposes. The only way I could seem them being ok with a legal, viable, regulated BTC is if it was kept small enough to be negligible. By that I mean small compared to QE infinity of $85 Billion a month. Bitcoin could grow by 100x and still be considered small. I would be ok with that :)