I thought this could be interesting for some of you.
It is a report about Bitcoin from Mercatus Center
"...The Mercatus Center at George Mason University (GMU) in the United States is a non-profit[1] American market-oriented research, education, and outreach think tank. It works with policy experts, lobbyists, and government officials to connect academic learning and real-world practice. The Mercatus Center takes its name from the Latin word meaning "markets", and reflects the Center's free market-based approach to solving public policy problems...."
http://en.wikipedia.org/wiki/Mercatus_CenterThe PDF Report talks about their recommendations
about how Bitcoin should be legislated, and that is what i found more intersting:
Here is the PDF
"Bitcoin a Primer for PolicyMakers"http://mercatus.org/sites/default/files/Brito_BitcoinPrimer_embargoed.pdfPolicy recommendations
As we have seen, Bitcoin does not easily fit into existing regu-
latory boxes. That is often the hallmark of a disruptive technol-
ogy. Indeed Bitcoin is a revolutionary technical achievement that
heralds amazing potential benefits to human welfare. However,
like any technology that can be used for good, it can also be used
for ill. The challenge for policymakers will be to foster Bitcoin’s
beneficial uses while minimizing its negative consequences. We
conclude with some recommendations to help policymakers meet
this challenge.
Don’t restrict Bitcoin
Because Bitcoin is essentially online cash, some who trade in
drugs and other illicit goods online have found it to be an ideal
medium of exchange. 103 Confronted with this fact, the initial
impulse of some policymakers will be to call for restrictions on
the technology. 104 There are many good reasons, however, to resist
such an impulse.
First, as a technology, Bitcoin is neither good nor bad; it is
neutral. Paper dollar bills, like bitcoins, can be used in illicit
transactions, yet we do not consider outlawing paper bills. We
only prohibit their illicit use. Furthermore, there is only anec-
dotal evidence about the extent to which bitcoins are utilized in
criminal transactions. It would be wise to put the criminal use
of the technology in perspective alongside its legitimate uses.
As the bitcoin economy grows, legitimate uses of bitcoins will
likely dwarf criminal transactions, 105 just as we see with paper
dollar bills.
Second, any attempt to restrict Bitcoin technology will only
harm legitimate uses while leaving illicit uses largely unaf-
fected. Because it is a decentralized global network, Bitcoin is
virtually impossible to shut down. There is no Bitcoin company
or other entity that can be targeted. Instead, Bitcoin and its
ledger exist only in the distributed peer-to-peer network cre-
ated by its users. As with the peer-to-peer file-sharing service
BitTorrent, taking down any of the individual computers that make up the peer-to-peer system would have little effect on the
rest of the network. Therefore, making the use of Bitcoin illegal
would not undermine the network; it would only serve to ensure
that law-abiding users are denied access to the technology. As a
result, society would forgo enjoying the many potential benefits
of Bitcoin without seeing any drop in criminal use.
Third, if Bitcoin were prohibited, the government would
forego the opportunity to regulate intermediaries in the bitcoin
economy, such as exchangers and money transmitters. The gov-
ernmental interests in detecting and preventing money launder-
ing and terrorist financing would be better advanced, not by pro-
hibiting the technology, but by requiring intermediaries to keep
records and report suspicious activities, just as traditional finan-
cial institutions do. Again, restricting the use of Bitcoin will only
ensure that criminals alone will use the technology. Any illicit
intermediaries that emerge, such as exchanges and payment pro-
cessors, will be unregulated.
Finally, even if the United States prohibited the use of Bitcoin,
it is likely that many other countries would not, recognizing the
technology’s many potential benefits. The Finnish central bank, for
example, has stated that the digital currency is not illegal, 106 and as
a result many Finnish businesses have begun to accept bitcoins. 107
By prohibiting Bitcoin use, the United States could put itself at an
international competitive disadvantage in the development and
use of what may be the next-generation payments system.
Normalize regulation and encourage further development
Rather than overreact to illicit uses of Bitcoin, policymakers would
be wise to take a calm and careful approach to the challenges posed by the new technology. Doing so would allow law enforcement to
pursue its interests in detecting and preventing money laundering
and terrorist financing while ensuring that society does not forgo
Bitcoin’s many benefits. Luckily, regulators to date have taken such
a cautious approach by slowly integrating Bitcoin into the existing
financial regulatory framework. Policymakers can take a few basic
steps to maintain the right balance.
In the short term, FinCEN should clarify its recent guidance,
especially as it relates to miners and users who do not obtain bit-
coins to purchase goods or services, but instead do so for other
legal and legitimate purposes. It should do this by welcoming pub-
lic participation of the Bitcoin community of developers, miners,
businesses, and users in formal public notice and comment pro-
ceedings. While FinCEN’s mission is to safeguard the financial
system from illicit use, it also has an obligation not to unduly hin-
der its technological development. Working with Bitcoin’s legiti-
mate users, there is no doubt FinCEN can achieve its goals while
minimizing regulatory uncertainty.
In the long term, policymakers should better define Bitcoin’s
broader regulatory status. As we have seen, the digital currency
does not comfortably fit any existing classification or legal defini-
tion. It is not a foreign currency, nor a traditional commodity, nor
is it simply a payments network. Consequently, applying existing
rules to Bitcoin could unduly impede Bitcoin’s legitimate devel-
opment without any attendant gains to law enforcement or con-
sumer welfare. As a result, policymakers may want to consider
developing a new category that takes into account the technol-
ogy’s unique nature. They should also carefully consider what
regulation, if any, bitcoin exchanges, payment processors, and
users should face.
Finally, policymakers should not only allow Bitcoin’s develop-
ment to continue unimpeded, they should help foster its growth
by revisiting existing regulatory barriers. One of the greatest
obstacles to Bitcoin’s legitimate adoption is the requirement that
businesses engaging in money transmission acquire a license from
each state. This is a duplicative, laborious, and expensive process
that presents a barrier to interstate commerce without much ben-
efit to consumers. Federal lawmakers and regulators should con-
sider whether preemption is necessary.
CONCLUSION
Bitcoin is an exciting innovation that has the potential to
greatly improve human welfare and jump-start beneficial and
potentially revolutionary developments in payments, communi-
cations, and business. Bitcoin’s clever use of public-key encryp-
tion and peer-to-peer networking solves the double-spending
problem that had previously made decentralized digital curren-
cies impossible. These properties combine to create a payment
system that could lower transactions costs in business and remit-
tances, alleviate poverty, provide an escape from capital controls
and monetary mismanagement, allow for legitimate financial
privacy online, and spur new financial innovations. On the other
hand, as “digital cash,” Bitcoin can be used for money laundering
and illicit trade. Banning Bitcoin is not the solution to ending
money laundering and illicit trade, just as banning cash is not a
solution to these same ills.
Bitcoin could ultimately fail as an experimental digital currency
and payment system. An unanticipated problem could arise and
undermine the bitcoin economy. A superior cryptocurrency could
outcompete and replace Bitcoin. It could simply fizzle out as a fad.
The possibilities for failure are endless, but one reason for failure
should not be that policymakers did not understand its workings
and potential. We are ultimately advocating not for Bitcoin, but
for innovation. It is important that policymakers allow this experi-
mentation to continue. Policymakers should work to clarify how
Bitcoin is regulated and to normalize its regulation so that we have
the opportunity to learn just how innovative Bitcoin can be.
Please excuse if this document or this text has already been presented to you, I found it quite interesting.
Wonder though if policymakers take their head from their asses once a while and read these kind of reports.
Poll
