Mercator has identified five different classes of digital currency regulation that have been enacted around the world that falls on a spectrum that goes from positive to negative. Tristan Hugo-Webb, Associate Director of the International Advisory Service and author of the paper, wrote:
The global payments industry has been taken aback by the rise of the new payment technology represented by Bitcoin and other digital currencies, which at its core has the potential to radically change the paradigm in which electronic payments are handled. Understandably, the response to this paradigm-changing technology has been mixed among regulators since true understanding of the benefits and opportunities as well as the disadvantages and consequences is hard to come by.
Digital Currency regulations have taken nearly every shape and form around the world. In a few countries, such as the UK and Germany, Bitcoin is recognized and/or taxed as a currency or private money, respectively. Elsewhere, such as in Ecuador and Russia, moves to ban Bitcoin and other similar digital currencies (cryptocurrencies) have started. Mercator’s research note highlights “an overview of the history of digital currencies and their regulation, a map of digital currency regulation around the world” (which is also available at bitlegal), and “a review of the types of regulation imposed on digital currencies and specific country examples.”
As Bitcoin companies start to “vote with their feet” and physically move to countries with more favorable regulations, different countries around the world will start to feel the effects of a “Bitcoin brain drain.” Unfortunately, this is not a favorable outcome to the citizens of the most anti-Bitcoin countries, arguably the ones that would benefit most from the promise of digital currency and Bitcoin technology.
What do you think about the divergent digital currency regulations? Comment below!
World map chart from Mercator; other images from Shutterstock.
Last modified (UTC): October 24, 2014 03:56