Due to regulatory uncertainties, most gold dealers will likely avoid accepting digital currency for gold payments, says industry insiders.
This comes in contrast after select gold distributors were willingly trading their precious metals for bitcoin not too long ago.
In an interview conducted by the IBTimes, gold retailer Morgan Gold says that questions regarding anti-money laundering prevented the company from accepting bitcoin payments for gold. CEO of the gold retailer David Cloyed said:
“My concern with bitcoin and the gold business would be the reporting laws that exist for the current gold industry. There’s a lot of questions that haven’t been answered about bitcoin and what it represents in terms of currency transactions, as they relate to gold.”
Digital Currency: Dark Past, Light Future
Bitcoin’s mystique, along with bad publicity due to the Silk Road black market scandal, have made it all the more difficult for banks, regulators and gold dealers to conduct business with the digital currency. The Silk Road website aided criminals to sell illegal drugs and money launder.
The IRS pulls the plug on money laundering by requiring cash payments of $10,000 or more to be documented by businesses, no matter what items are being sold.
Morgan Gold’s chief strategist Edmund Moy claims that gold dealers must be cautious in dealing with virtual currencies, as regulatory risks are very high.
In March 2013, combatant of money laundering, FinCEN, claimed that digital currencies and fiat currencies are not identical. However, now bitcoin is viewed as currency by FinCEN, since more business and criminal dealings prove its worth.
CBMint chief financial officer Chris Martinez claims that a business’ acceptance of bitcoin automatically considers it a monetary service institution under the Bank Secrecy Act. CBMit is a precious metals dealer.
Martinez and his company were told by JPMorgan Chase that if his company were to start accepting bitcoin, that CBMit would not be allowed to further conduct business transactions with Chase. In this case, bitcoin is a threat to Chase and viewed as a currency.
Martinez told the IBTimes, “If we decide to accept bitcoin in the future, we will likely have to look elsewhere”.
Chase Bank’s philosophy leans towards either being with them or against them, and anyone involving themselves with bitcoin is against seen as most certainly them.
Gold retailers involvement in bitcoin could lead to a bitcoin boom, as the digital coin bould be welcomely traded for a gold coin.
Companies such as CBMit need to decipher whether they want things to remain the way they are, or if a change is in order with the help of bitcoin.
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