Phil Archer – U.S. Regulators Confused On Bitcoin

Phil Archer – U.S. Regulators Confused On Bitcoin:

Phil Archer’s post on TheGenesisBlock.com describes how regulators are having a difficult time figuring out what where Bitcoin fits.  Excerpts:

“[CFTC’s Bart Chilton] stated on bloomberg.tv: ‘In essence, we’re talking about a type of shadow currency, and there is more than a colorable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction.’”

“Bitcoin clearly does not derive its value from the future purchase of an underlying asset. Therefore, if the CFTC plans to regulate bitcoin, they must consider bitcoin either a commodity or forex, with the intent to regulate bitcoin forex or bitcoin derivatives.”

“Since bitcoin is not the currency of a foreign government, but rather the first global currency, it would seem their power to regulate bitcoin as forex does not apply.”

“Bitcoin being declared a commodity would create an interesting contrast with fincen’s March guidance requiring bitcoin exchanges to be registered as Money Service Businesses (MSB).”

“So it seems the US Government has no idea how to classify bitcoin: is it a currency or a commodity? Any CFTC ruling would likely declare bitcoin a commodity and put it in a Schrodinger’s Cat state – it would coexist as both a currency and a commodity.”

“FinCEN was forced to create a new definition for virtual currencies, and we expect the CFTC to do the same. However, those living in fear of what the CFTC’s decision may hold should have solace in the fact that any regulations will be largely unenforceable anyway.”

 – http://bit.ly/10vfONv
 – http://bitcointalk.org/index.php?topic=200305.0 (Further discussion of the topic)

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