Kaylene Hong was Asia Reporter for The Next Web between 2013 and 2014, based in Singapore. She is bilingual in English and Mandarin. Stay in Kaylene Hong was Asia Reporter for The Next Web between 2013 and 2014, based in Singapore. She is bilingual in English and Mandarin. Stay in touch via Twitter or Google+.
The Bitcoin industry is getting more eyeballs from authorities in various countries, who are seeking to understand the virtual currency’s role in their economy and form regulations to govern the whole ecosystem — as a testimony to the rise of Bitcoin’s popularity and the subsequent concerns that arise from using it.
After Thailand ruled Bitcoin as illegal and (apparently) banned it late last month, the US has stepped into the fray as it announced plans to start investigating the virtual currency, seeking to “understand and provide a sensible regulatory framework,” according to the Washington Post.
At the same time, India’s central bank has spoken up to say that it is “watching” Bitcoin, though it has no intention of regulating the currency now, The Economic Times reports.
The Reserve Bank of India had previously acknowledged, however, that virtual currencies “pose challenges in the form of regulatory, legal and operational risks.”
In June, US authorities were examining the use of virtual currencies such as Bitcoin amid fears that Americans were using them to evade taxes.
Right now though, the Washington Post says that Congress is delving into a more complete investigation of the role that Bitcoin is playing in the economy, with the US Homeland Security Committee requesting for more details on the Obama administration’s current “policies, procedures, guidance or advisories” related to virtual currencies and information about “plans or strategies regarding virtual currencies.”
Besides Congress, the New York Department of Financial Services has also announced that it is opening an investigation into Bitcoin too — and subpoenaed 22 companies that were determined to play a significant role in the Bitcoin economy as it sought to conclude if and how these firms are subject to New York financial regulations.
Brock Pierce, a key player in the Bitcoin scene in the US, has told TNW that he thinks regulation is inevitable and necessary for Bitcoin to be sustained in the long run:
I am encouraged and support Congress’s actions as it has the potential to create a single, coherent federal regulatory framework versus a patchwork of state level and department level rules which will be complex and expensive to navigate, and potentially even be contradictory. Having a clear set of rules at the federal level would potentially balance governmental concerns, consumer protection and the interests of companies in the Bitcoin ecosystem.
According to the Economic Times, India-based Bitcoin users and entrepreneurs are also hoping for the Indian central bank to recognize it as a legitimate currency. It cites Benson Samuel, a Bangalore-based Bitcoin enthusiast who runs knowledge portal coinplace.tk, as saying:
Bitcoin is emerging in India and it would benefit the users if RBI could regulate it or take ownership of it.
The popularity of Bitcoin has surged in recent years, and this is best displayed in the troubles that top Bitcoin exchange Mt. Gox has been facing. In addition to bearing the strain of larger volumes of transactions, the company has suffered a number of DDoS attacks and was forced to halt trading in April following a major Bitcoin price crash.
Last month, Mt. Gox reopened US dollar withdrawals on its service after suspending the option two weeks ago in order to make upgrades to its system.
Earlier this month, Mt. Gox said that its service is now running on Akamai, a move that will bring greater stability to the growing platform.
Headline image via George Frey/Getty Images
Get the TNW newsletter
Get the most important tech news in your inbox each week.