Weekly Digest: China Breaks Silence, Capitol Hill Bitcoin Purchase

Here at CoinReport, we like to breakdown the week’s bitcoin news and headlines for our readers. News this week, ending April 11th 2014, has continued to revolve around discussions of bitcoin regulation, taxation and the future of bitcoin.

PBOC Governor breaks silence on Bitcoin

For most of the week, we continued to see the bitcoin price drop due to uncertainty as China continues to hint towards restricting bitcoin. Many of the Chinese exchanges began receiving notifications from their respective banks, stating their accounts must be closed. This in effect was the cause of the price drop. Regardless of the effects of these notification on the price or the exchanges themselves the Chinese bitcoin community remains steadfast. BTC38 finished off a recent statement with the following message

“Regardless where the future road takes us, we hope that everyone gives this industry a healthy atmosphere, to encourage the competitiveness of emerging platforms. BTC38′s service will always make you comfortable and BTC38 will continue to focus on healthy development in the virtual currency industry.”

Finally, in a welcoming move, the governor of People’s Bank of China finally released an official statement confirming China will not be banning bitcoin, causing the price of bitcoin to rebound once more. The  governor of the People’s Bank of China, Zhou Xiaochuan clarified:

“It is out of the question of banning bitcoin as it is not started by central bank. Bitcoin is more a kind of tradable and collectible asset, such as stamps rather than a payment currency.”

Varied Stances Taken by Banks Globally

National Australian Bank notified customers of plans to cut off bitcoin accounts in a move to protect the reputation of the bank and shareholders from these high risk  accounts. Unfortunately NAB is not the first bank across the globe to take such drastic measures.The Bank of Montreal and Bank of Ireland took similar stances in the recent past. Thankfully, the Bank of Japan has not been so hasty in their decision on bitcoin and digital currencies. This is despite the fact that BOJ Chief, Haruhiko Kuroda, does not believe Bitcoin will be successful unless it proves to be reliable. He elaborated that:

“Without safety or stability in its value, there would be no demand. In that sense, it cannot be a currency.”

It is quite understandable that a cautious approach would result following the MtGox saga. Incidentally investors have been in talks to purchase MtGox, for a whopping one bitcoin.

United State’s Capitol Hill Bitcoin Purchase

United States Congressman Jared Polis has become the first known representative to buy bitcoin at Capitol Hill. This comes after his invitation for Robocoin to come to Capitol Hill and do a presentation. The bitcoin ATM manufacturing company was to bring its ATM to the capitol office and demonstrate the device to the congress present and other officials who attended the event. Polis exchanged $10 for .02 BTC. His transaction was an attempt to show his colleagues how safe and easy bitcoin is to use.

Polis says that his colleagues were skeptical of Bitocin due to a limited understanding. He said:

“When people don’t understand something there’s a natural tendency to fear it to try to preserve the status quo, and I expect those forces to continue to rear those heads, particularly with inevitable consumer loss and criminal activities that occur with any currency.”

To pay homage to the first uses of bitcoin, Polis says he will buy a pair of alpaca socks.

Canada on Bitcoin

In a promising move, the Canadian Senate’s Standing Committee on Banking, Trade and Commerce met with the Bitcoin Strategy Group, BitAccess, and CAVirtEx and took important steps to try to understand bitcoin and the benefits of bitcoin regulation. While bitcoin regulation is being called for globally, it needs to be done fairly. Interestingly, the Canadian Senate are more concerned about regulation diminishing the benefits of bitcoin  than it’s potential impact on the Canadian dollar. When the suggestion was made that perhaps bitcoin shouldn’t be regulated for this reason, Bitcoin Strategy Group’s Kyle Kemper reasoned:

“Canada has become one of the leading countries in the world in terms of Bitcoin entrepreneurship and innovation. Before we can come to any conclusions, we must understand what Bitcoin is, how it works, and what the future with Bitcoin may look like.”

The request was made for the Canadian Senate to consider regulating bitcoin as a foreign currency; a request that was met with interest by the Senators present. Things are looking up for bitcoin in Canada at least.

Looking forward, focus on the Positive

Despite the current negativity surrounding bitcoin, new start ups, ATMs, and programs continue to be developed and released as advocates forge ahead. A new graduate level bitcoin course, is in the works at NYU. The course itself, to be available from Autumn 2014 is expected to be titled:

“The Law and Business of Bitcoin and Other Cryptocurrencies.”

A professional qualification in a subject always does wonders for a field. An official qualification in bitcoin will not only increase the exposure of bitcoin to the next generation of university students but will hopefully result in the addition of more recognized experts in the field.

More Countries set to Adopt National Altcoins

Israel is hoping to maintain its position of third place in the cryptocurrency market with Isracoin following its upcoming airdrop. Positioned just behind  bitcoin and litecoin, Israel has joined Iceland (Auroracoin) and Spain (Spaincoin) with the adoption of its own national altcoin. Now Scotland is debating the potential adoption of their own form of digital currency, Scotcoin, as a back up to the current traditional currency. If adopted this could potentially be replicated by other countries world wide, as a similar plan B option. Even as a back-up plan the adoption of any cryptocurrency on a national level is a huge step in the right direction, for the future adoption of bitcoin (or an alternative) globally.

Bitcoin Compliance Program

IdentityMind and Jumio have teamed up to produce the Bitcoin Compliance Program, designed to meet the regulatory and compliance issues required in the United States. The program, called IGNITE is designed to tackle the issues currently causing difficulties for new start ups in terms of compliance with regulations defined by FinCEN and the Bank Secrecy Act.

According to IdentityMind’s press release:

“IGNITE provides the protection, processes, visibility, and reporting required to build relationships with traditional banks and financial institutions, simplifying the regulatory process and accelerating entry to market for digital currency startups.”

Overall, the partnership between Jumio and IdentityMind will provide a solution to reducing risks of fraud to eCommerce retailers, financial institutions, and payment service providers alike.

Despite external concerns, the bitcoin community continues to make positive strides ahead, though not blindly so. Efforts to broaden the reach of bitcoin and connect with the community have been successful through bitcoin expos.  The Central European Bitcoin Expo and the Toronto Bitcoin Expo are two of the next upcoming events sure to delight attendees. Bring on the summer!

Featured image credit: Siegfried Layda