While the bitcoin rate is climbing new heights nearly every week, it becomes more and more obvious that a regulatory environment around the bitcoin and other cryptocurrencies has to evolve as well. Until now there has been two Asian countries, China and Japan, that have announced its desire to regulate their local bitcoin exchanges. This week these countries were joined by Australia, another major market. Let’s quickly analyse the pros and cons of such practices.
Today the bitcoin is used for nearly all possible kinds of transactions. It is possible to buy a cup of coffee, pay a tuition fee in some universities or simply settle down your mortgage payments using it. However, there are other industries where the bitcoin became a catalyst.
When we are talking about online gambling, we can clearly see that the bitcoin has provided this enormous industry with a trusted, fast, cheap and most importantly, anonymous way to pay online. This is why the popularity of online bitcoin casinos is increasing with the speed of light. When browsing popular Bingo sites in UK it is easy to spot that many of them either offer services in BTCs or simply allow players to top up their accounts using bitcoins. Bitcoin gambling in the UK became so huge that the UK Gambling Commission had to actually regulate the operators and started issuing the licenses earlier this year.
When we speak about casinos and betting in Australia, it is important to note that the country is now in the process of changing its gambling regulation regulation. The results of the amended regulation have already been felt, quite a few gambling companies have exited the market and more are expected to stop operating in the country within the coming weeks. Consequently, more severe regulations in the bitcoin space will assist Australian officials in keeping the industry compliant.
Next to this, it is a common knowledge that the bitcoin is a main currency for various illegal activities: ransoms, drug deals, weapons and more. Once the exchanges get regulated, illegal transactions will not be as frequent, at least on the territory of Australia.
However, the above use cases are not the main rationale behind regulating the bitcoin exchanges in Australia. As it happens quite often with all of the financial bills, the changes are introduced to prevent money laundering and terrorism financing. As the bitcoin transactions are currently anonymised, they happen to be the least trackable. Besides that, as the bitcoins are just the pieces of the information, they can easily be transported.
While we can certainly say that this questions is debatable, we can assume that the more regulation is behind the cryptocurrencies, the wider audience they will receive. And once there are more users, there will be more businesses willing to accept BTCs as a payment method without exchanging it for a fiat currency straight away. Isn’t it what most of the bitcoin supporters want?
In contrast, the regulation will require the exchanges to implement KYC procedures for its clients. This will remove anonymity from the digital currencies, and anonymity was actually one of the reasons why the bitcoin became so popular.
It will take some time for the regulation to be implemented, and even once all the laws are passed, it would not mean that the every Aussie will have to be compliant. Only the local exchanges will be the subjects for such laws, yet an Australian could easily find a way to use a bitcoin exchange that is not regulated locally, yet serves Australian customers. Hence, people that require the privacy will still be able to get, while the general public will be provided with a solid regulatory support.
This article was produced by Financemakers.com, partner of CCN.
Last modified: May 21, 2020 9:36 AM