As Bitcoin trading gains traction and more firms in the US want to offer products, regulatory bodies enter the mix.
Courtesy of our friends at CFTCLaw.com….. The CFTC is now considering whether or not Bitcoin falls under its regulatory scope. Bart Chilton, Commissioner of the CFTC, was quoted in the Financial Times that Bitcoin “is for sure something we need to explore. It’s not monopoly money we’re talking about here — real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be ‘out there’ transactions.”
What is the future like for Bitcoin, at least the regulatory future like? It is safe to say that potential regulation from agencies like the CFTC in the US and the newly formed FCA in the UK, is the biggest challenge Bitcoin faces today. For right now, the US Government has not said much regarding the digital currency, but as interest grows in Bitcoin and more companies offer Bitcoin trading options to traders then regulatory agencies will start to consider ways to regulate it. Recently, PayPal announced they were looking into ways to offer Bitcoin as a method of payment. This will help Bitcoin’s reputation and as companies like PayPal start offering payment type services, then government agencies like the US Treasury will want a better paper trail and governance to prevent money laundering,as just one example of how regulators will likely get involved.
As regulatory agencies move forward, it is evident that they want to make Bitcoin more transparent. While we feel that agencies will not go as far as to ban Bitcoin, the actual premise and type of regulation will be interesting to watch develop. As the US begins to regulate Bitcoin trading, will Bitcoin opt to ignore the US market? We will have to wait and see how things unfold.
For more on Forex regulation see the LeapRate-Dow Jones Forex Industry Report.