Bitcoin regulation has generally been met with a lot of opposition in the past months, as most cryptocurrency enthusiasts say that this could just stifle innovation. For instance, the BitLicense framework in New York has been harshly criticized for its exorbitant license fees imposed on bitcoin startups, leaving some to move operations elsewhere.
However, Nasdaq writer Martin Tiller suggests that political interest might actually be good for bitcoin. He highlighted the shift in treatment for bitcoin among authorities, who used to be vehemently opposed to the concept earlier on then eventually started entertaining practical applications of the cryptocurrency.
In Bitcoin We Trust?
Perhaps the focal point of the debates on whether bitcoin regulation should be pursued or not is the decentralized nature of the network. For many, what makes the cryptocurrency appealing is the fact that its value or amount in circulation is not controlled by a central bank or government but by the people or the network itself. In addition, the anonymity of transactions might have to be given up if a regulator is able to gain oversight on the industry.
Interestingly enough, some politicians have adopted a different approach when it comes to showing an open-minded stance towards bitcoin. Some have used it to accept funding for political campaigns, such as Rand Paul. Another example is Presidential candidate Rick Perry who said that he favors “regulatory breathing room for digital currencies.” In another part of the world, a London mayoral candidate said that he would put the office’s budget on the blockchain to enhance transparency.
“Although many in the Bitcoin community will see government interest as a bad thing by definition, that is not necessarily the case,” wrote Tiller. “Decentralized peer to peer currencies are by nature untamable, so the downside to interest from politicians seems limited. The upside, however, of greater exposure and even a regulatory framework that increases trust without placing an undue burden could be huge.”
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