Bitcoin regulation is a topic of heavy debate around the world, especially since the BitLicense requirements were made publicly available. In the United States; every individual state can draft their own Bitcoin regulatory requirements, and it looks like California will be the next place to do so.
Bitcoin Regulation To Harm Innovation?
One of the main concerns surrounding Bitcoin regulation is whether or not local requirements will be beneficial to technological innovation in the digital currency space. There will always be different opinions regarding this matter, and in California, the pending Bitcoin regulation is causing a disruption between several parties.
Bitcoin regulation in California is nothing new under the sun, as the proposed guidelines had been made available in February of this year. Whenever a new bill is proposed, it will have to go through a lengthy approval process. A major milestone was reached once the Senate Transportation and Housing Committee passed the bill in July.
Once the proposed guidelines were made available to the public, the Electronic Frontier Foundation, and Copia Institute rose to the occasion to voice their concerns regarding Californian Bitcoin regulation. Anyone in the state of California, who is concerned about these guidelines, should reach out to state officials immediately.
While it is only normal to see various industry members having doubts regarding regulatory requirements, Bitcoin needs some form of a framework in order to gain a more legitimate status in the world of finance. Even though some Bitcoin enthusiasts would like nothing more than to go on without any form of regulation in place, it would not be the best course of action.
The main focus of these Bitcoin regulatory guidelines is whether or not individuals and companies will be labeled as money transmitters. For individual users, developers and coders, those questions are of great importance in terms of avoiding legal penalties. Most Bitcoin companies will be classified as money transmitters no matter what, and will more likely than not need to obtain a specific license.
Despite the guidelines passing their first hurdle, it will most likely take until early 2016 until Bitcoin regulation will go into full effect in the state of California. Until that time, Bitcoin industry experts and lawmakers have plenty of time to work out a better regulatory framework that can suit all parties involved.
Wrong Approach In Dealing With Bitcoin Companies?
One major question remains though: are the current regulatory guidelines in most states harmful to Bitcoin companies? The Bitcoin industry is still very young, and over-regulating it could kill the technological gain to be made before there is even a chance to look at things properly. That being said, nearly every US states could force Bitcoin companies to get a license right now, without having to “invent” a new one.
All in all, proper Bitcoin regulation in California could bring multiple benefits to the table. Having the option to keep part of their investment in digital currency, for example. Additionally, the regulation would give Bitcoin startups a better overview of how they should go about their business, and where they can go for help if needed.
Source: Press release via email
Images courtesy of Shutterstock, EFF