Should Bitcoin be banned to allowed to thrive, is a 6-billion-dollar question for which the answers are conflicting. A couple of days ago, the European Commission suggested that Bitcoin Exchanges and trading platforms should come under Anti Money Laundering (AML) and Know Your Customer (KYC) regulations in order to prevent the use of bitcoin by terrorist organizations. Similarly, yesterday’s news reports stated that Russia has made changes to its criminal code which makes issuing bitcoin and other digital currencies illegal. According to the amended criminal code, those convicted of such activities face up to 2 years of detention along with a penalty of about 500,000 rubles.
On the positive side, the Commonwealth of Nations‘ Commonwealth Working Group on Virtual Currencies has published a report that calls for all member nations to address the legality issue of Bitcoin. There is no clarity about the legal status of Bitcoin in many countries across the world. Central Banks in these countries have so far opted for a wait and watch approach instead of introducing regulations in a hurry. The main reason being the relative age of this virtual currency. Bitcoin is known to have lot of potential and the rapid pace of innovation happening in this sector has been promising and these countries do not want to hamper it at this moment.
The Commonwealth of Nations’ report urges its member states to declare Bitcoin legal. One of the rationale behind this decision is the difficulty of enforcing restrictions on a global decentralized digital currency like Bitcoin. Apart from that, the report also points out the latest developments the arena of bitcoin and its underlying blockchain technology. Bitcoin has proven to revolutionize payments and remittance industry. The continuing research has also shown the potential of bitcoin to bring in positive changes to the fintech and banking sector as well.
However, the recommendations come with riders. By making Bitcoin legal, the Commonwealth countries are also required to make their technology related laws applicable to Bitcoin as well. The report also calls for implementation of necessary AML and KYC regulations to ensure that bitcoin is not being used for unlawful purposes. Should the recommendations of this report be implemented by all member nations, the legal status of bitcoin will become clear in over 53 countries across the world.