Why Authorities are Baffled with Virtual Currencies?

ebdbitcoin07 July 2014 / ForexMinute.com – The European Banking Authority (EBA) dropped a bomb on the cryptocurrency businesses in Europe when it asked the commercial banks to avoid using Bitcoin and other cryptocurrencies, until the industry is effectively regulated. The text particularly discourages financial institutions to purchase, sell and protect digital currencies.

This event once again brought the famous war between governments and virtual currencies. So far this week, we have heard of the US Senate committee to start a research on Bitcoin, and the New York’s Department of Financial services issuing a notice to several companies asking how they operate cryptocurrencies.

When it comes to the reasons behind such bafflements, almost all the financial authorities sing the same melody. Drug and weapon trafficking, terrorism, financial frauds, piracy and child pornography turn out to be some of the major problems which Bitcoin and other digital currencies openly inflate, says the authorities.

It is after all a fabricated perception if one digs a little bit further. The EBA paper says too many negative things about cryptocurrencies, all at once, in order to manipulate mind sets that already favor them. For instance, the authority speaks of is the volatility of cryptocurrency markets which can significantly reduce investments. But they never seem to care about telling that virtual currencies are nothing but an asset, like stocks, which functions solely on the ration of demand and supply. Like a stock’s value can be reduced to none, an asset like Bitcoin can also lose some value after a time. The vice versa of this situation is equally possible.

Some other worthless reasons given by EBA include is identity theft related to cryptocurrencies (what of credit cards then?), exposing to new tax laws (so what, don’t impose them), incorrect debits (no comments), etc. Our question however is, why not simply banning these cryptocurrencies when they possess such a danger…… Read more



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