Deloitte, the global audit and consulting firm recently released a report on bitcoin regulations. Authored by Jon Watts, director of Enterprise Risk Services at Deloitte’s New York office speaks about the evolving digital currency regime and its implications.
The report can be related to current situation regarding bitcoin regulations in the United States. The introduction of BitLicense in New York State and other regulations being implemented in different states have been detrimental to the bitcoin industry. He questions whether the governments are rushing with bitcoin regulations, nipping the industry in bud, while there is a lot of unexplored potential locked away, waiting to be implemented.
Bitcoin has been a game changer. It changed the way money transfer happens between people irrespective of boundaries. The technology enabling these transactions, Blockchain by itself is a marvel as it answered a problem faced by technology sector for years now. While the concept of digital currency itself is decades old, the problem of double spending had kept it from further development. Satoshi Nakamoto changed it with bitcoin. Now the development of digital currency technology seems to be right on track just like the way governments and tech giants wanted it to be, they are not able to exert control over it. Thanks to the decentralized nature of bitcoin. And, that’s exactly the reason why governments are introducing one regulation after another in an attempt to control it.
In the current scenario, the total value of bitcoin stands at about $4 billion, which is insignificant compared to vast global economy. Even a comparison with 1.36 trillion USD, which is the current of US banknotes and coins in circulation today is ridiculous. Many people know about bitcoin, but a very small portion of them actually use bitcoin. These statistics combined with the fact that investments in bitcoin sector is growing year-on-year shows that bitcoin regulations are being rushed upon by the governments and it may end up causing more harm to the overall economy than good.
Bitcoin has been in the receiving end of a raw deal. Jon mentions that compared to bitcoin other ground breaking innovations like telephones, airplanes, radio and even internet had an ample amount of time to evolve (on an average at least 30 years) before being regulated. Not to mention the enormous potential bitcoin has to change the way financial sector works across the world.
The rush to regulate bitcoin among governments, especially in the United States is not really helping the case of economic development on a long run. Whether bitcoin can survive this onslaught and emerge stronger of will it fade into the oblivion in the process is something that only time will tell.