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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What Charles Windsor’s garden reveals about the future of the British monarchy

As an open-minded republican, two things struck me. 

First we are told that the Chancellor, Philip Hammond, has lost his battle for a “soft” Brexit. In a joint article, he and the International Trade Secretary, Liam Fox, the hardest of the ministerial Brexiteers, seem to agree that the UK will leave the European customs union in 2019. Then we get a reverse ferret. Hammond will go for a softish Brexit, after all. A government paper states that the UK will seek a “temporary customs union” in the “transition period” that, it hopes, will follow Brexit.

All this is a taste of things to come. We shall see many more instances of hard and soft Brexiteers celebrating victory or shrieking about betrayal. We shall also see UK and EU leaders storming out of talks, only to return to negotiations a few days later. My advice is to ignore it all until Friday 29 March 2019, when UK and EU leaders will emerge from all-night talks to announce a final, impenetrable fudge.

Lessons not learned

What you should not ignore is the scandal over Learndirect, the country’s largest adult training and apprenticeships provider. An Ofsted report states that a third of its apprentices receive none of the off-the-job training required. In a random sample, it found no evidence of learning plans.

Labour started Learndirect in 2000 as a charitable trust controlled by the Department for Education. It was sold to the private equity arm of Lloyds Bank in 2011 but remains largely reliant on public money (£158m in 2016-17). Since privatisation, 84 per cent of its cash has gone on management fees, interest payments and shareholder dividends. It spent £504,000 on sponsoring the Marussia Formula One team in an attempt to reach “our core customer group… in a new and exciting way”. The apprentices’ success rate fell from 67.5 per cent before privatisation to 57.8 per cent now.

This episode tells us that, however the Brexit process is going, Britain’s problems remain unchanged. Too many services are in the hands of greedy, incompetent private firms, and we are no closer to developing a skilled workforce. We only know about Learndirect’s failure because the company’s attempt to prevent Ofsted publishing its report was, after ten weeks of legal wrangling, overthrown in the courts.

A lot of hot air

Immediately after the Paris climate change accord in 2015, I expressed doubts about how each country’s emissions could be monitored and targets enforced. Now a BBC Radio 4 investigation finds that climate-warming gases emitted into the atmosphere far exceed those declared under the agreement. For example, declarations of methane emissions from livestock in India are subject to 50 per cent uncertainty, and those in Russia to 30-40 per cent uncertainty. One region in northern Italy, according to Swiss scientists, emits at least six times more climate-warming gases than are officially admitted. Remember this when you next hear politicians proclaiming that, after long and arduous negotiations, they have achieved a great victory.

Come rain or come shine

Climate change, scientists insist, is not the same thing as changes in the weather but writing about it brings me naturally to Britain’s wet August and newspaper articles headlined “Whatever happened to the sunny Augusts of our childhood?” and so on. The Daily Mail had one in which the writer recalled not a “single rainy day” from his family holidays in Folkestone. This, as he explained, is the result of what psychologists call “fading affect bias”, which causes our brains to hold positive memories longer than negative ones.

My brain is apparently atypical. I recall constant frustration as attempts to watch or play cricket were interrupted by rain. I remember sheltering indoors on family holidays with card games and books. My life, it seems, began, along with sunshine, when I left home for university at 18. Do psychologists have a name for my condition?

High and dry

Being an open-minded republican, I bought my wife, a keen gardener, an escorted tour of the gardens at Highgrove, the private residence of the man I call Charles Windsor, for her birthday. We went there this month during a break in the Cotswolds. The gardens are in parts too fussy, rather like its owner, but they are varied, colourful and hugely enjoyable. Two things struck me. First, the gardens of the elite were once designed to showcase the owner’s wealth and status, with the eye drawn to the grandeur of the mansion. Highgrove’s garden is designed for privacy, with many features intended to protect royalty from the prying public and particularly the press photographers’ long lenses. Second, our guide, pointing out what the owner had planted and designed, referred throughout to “His Royal Highness”, never “Charles”. I am pondering what these observations mean for the monarchy and its future.

Sympathy for the devil

Before leaving for the Cotswolds, we went to the Almeida Theatre in north London to see Ink, featuring Rupert Murdoch’s relaunch of the Sun in 1969. Many accounts of Murdoch  portray him as a power-crazed monster and his tabloid hacks as amoral reptiles. Ink is far more nuanced. It shows Murdoch as a mixture of diffidence, charm and menace, in love with newspapers and determined to blow apart a complacent,
paternalistic British establishment.

You may think that he and the Sun had a permanently coarsening effect on public life and culture, and I would largely agree. But he was also, in his own way, a 1960s figure and his Sun, with its demonic energy, was as typical a product of that decade as the Beatles’ songs. The play strengthened my hunch that its author, James Graham, who also wrote This House, set in the parliamentary whips’ offices during the 1970s, will eventually be ranked as the century’s first great playwright.

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear