Bitcoin – to regulate or not to regulate?

And by whom?

The virtual currency Bitcoin has pretty much taken the world by storm since it’s launch in 2009. With impressive value growth, the currency has quickly become a popular choice for traders and investors. Some have even suggested that the Bitcoin and other virtual currencies could be the saving grace for countries in dire economic straits.

In March, the world’s first Bitcoin ATM was opened on Cyprus after banks had been closed for a week. The ATM allows customers to deposit “real money” into a Bitcoin ATM in exchange for bitcoins and vice versa – making the virtual currency, a very real option for those who didn’t have access to money during the Cypriot crisis.

So seemingly, the cyber-currency seems to be taking off. Stateless and bankless, Bitcoins are not subject to regulation or fees, and therefore enjoy extreme volatility, according to its proponents. But according to regulators, this is exactly the problem.

For example, Bitcoin value recently dropped by nearly 80 per cent from an all-time high of $266 before crashing to $55 on one particular bleak April day, resulting in large losses for investors.

This prompted the US financial regulator, CFTC, to consider regulating the virtual currency Bitcoin in a bid to protect consumers against the risks associated with the currency.

Growing concerns over the online cash being used for illicit activities also led the US Treasury Department to implement new money-laundering rules, forcing Bitcoin and other virtual currency firms to comply with strict regulation.

With new regulatory scrutiny, proponents of the virtual currency might find themselves hard-pressed to maintain Bitcoins’ independence from the financial authorities.

But I can’t help but ask, are these latest moves by the American authorities, too little too late?

One Bitcoin investor recently stated that if US regulations made it hard for Bitcoin businesses to operate in the US, then they would just move to other countries and still be able to use the currency wherever they wanted.

And what’s more, bitcoins have already become a global phenomenon, reaching consumers across the world and bringing with it, it’s extreme potential for risk. So the question is how much of an impact the regulation of one state can have on virtual currencies? Rather it seems, that if Bitcoin and its competitors should be regulated, it should be by a global regulatory body. So I’m definitely hoping that the potential for both extreme growth and risk in bitcoins is acknowledged soon by more than just the US regulators. 

Whether or not you support the concept or have ever bought a Bitcoin, the matter of fact is, that a lot of other people have. And with ongoing financial turmoil, many more might come to rely on the virtual currency. So hint hint regulators, now is definitely the time to ask – to regulate or not to regulate the Bitcoin?

Photograph: Getty Images

Sandra Kilhof Nielsen is a freelance writer and former reporter for Retail Banker International, Cards International & Electronic Payments International.

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A global marketplace: the internet represents exporting’s biggest opportunity

The advent of the internet age has made the whole world a single marketplace. Selling goods online through digital means offers British businesses huge opportunities for international growth. The UK was one of the earliest adopters of online retail platforms, and UK online sales revenues are growing at around 20 per cent each year, not just driving wider economic growth, but promoting the British brand to an enthusiastic audience.

Global e-commerce turnover grew at a similar rate in 2014-15 to over $2.2trln. The Asia-Pacific region, for example, is embracing e-marketplaces with 28 per cent growth in 2015 to over $1trln of sales. This demonstrates the massive opportunities for UK exporters to sell their goods more easily to the world’s largest consumer markets. My department, the Department for International Trade, is committed to being a leader in promoting these opportunities. We are supporting UK businesses in identifying these markets, and are providing access to services and support to exploit this dramatic growth in digital commerce.

With the UK leading innovation, it is one of the responsibilities of government to demonstrate just what can be done. My department is investing more in digital services to reach and support many more businesses, and last November we launched our new digital trade hub: www.great.gov.uk. Working with partners such as Lloyds Banking Group, the new site will make it easier for UK businesses to access overseas business opportunities and to take those first steps to exporting.

The ‘Selling Online Overseas Tool’ within the hub was launched in collaboration with 37 e-marketplaces including Amazon and Rakuten, who collectively represent over 2bn online consumers across the globe. The first government service of its kind, the tool allows UK exporters to apply to some of the world’s leading overseas e-marketplaces in order to sell their products to customers they otherwise would not have reached. Companies can also access thousands of pounds’ worth of discounts, including waived commission and special marketing packages, created exclusively for Department for International Trade clients and the e-exporting programme team plans to deliver additional online promotions with some of the world’s leading e-marketplaces across priority markets.

We are also working with over 50 private sector partners to promote our Exporting is GREAT campaign, and to support the development and launch of our digital trade platform. The government’s Exporting is GREAT campaign is targeting potential partners across the world as our export trade hub launches in key international markets to open direct export opportunities for UK businesses. Overseas buyers will now be able to access our new ‘Find a Supplier’ service on the website which will match them with exporters across the UK who have created profiles and will be able to meet their needs.

With Lloyds in particular we are pleased that our partnership last year helped over 6,000 UK businesses to start trading overseas, and are proud of our association with the International Trade Portal. Digital marketplaces have revolutionised retail in the UK, and are now connecting consumers across the world. UK businesses need to seize this opportunity to offer their products to potentially billions of buyers and we, along with partners like Lloyds, will do all we can to help them do just that.

Taken from the New Statesman roundtable supplement Going Digital, Going Global: How digital skills can help any business trade internationally

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