While there are currently many different countries around the world making their own recommendations when it comes to how Bitcoin should be regulated, the reality of the situation is that most central banks and regulators are looking to the United States for guidance on this matter. Although many Bitcoin entrepreneurs in the United States have denounced their country’s stance on Bitcoin thus far, the truth of the matter is that New York City is still the financial center of the world. There has been a lack of real action from most countries around the world when it comes to Bitcoin’s legality as a currency or payment system, but we could see that change as the BitLicenses are sorted out in New York. For better or worse, most countries look towards the United States for guidance on AML, KYC, and other forms of financial regulation, so it would be a surprise to see this trend break when it comes to Bitcoin.
Waiting for the United States to Take Action
BTC China CEO Bobby Lee has stated that most countries are “probably mentally deferring to the United States” when it comes to Bitcoin regulation, and it would be quite difficult to find a source closer to the regulatory environment around cryptocurrency than the guy who is running one of the world’s largest Bitcoin exchanges. There was a bit of a panic in the Bitcoin community after China seemingly banned all Bitcoin transactions back in December, but it turns out that the Chinese government is simply keeping banks out of the mix for now. This makes sense in a country that likes to have immense control over the economy in order to prevent large bubbles that lead to epic collapses. Whether or not these kinds of restrictions actually work is another story. At the end of the day, most other states in the US will likely look to New York for guidance when it comes to new Bitcoin regulations, which means Financial Superintendent Ben Lawsky could be the most important man in the world when it comes to Bitcoin regulation right now. What he and the rest of the New York Department of Financial Services decide to do will have a ripple effect through the United States and the rest of the world.
More Harsh Words for His Competitors
In addition to commenting on the regulatory environment in China and the rest of the world at CoinSummit, Bobby Lee also had some harsh works for his competitors in China. He has claimed that certain exchanges, such as Huobi, have faked trading data in the past, and he is definitely not backing down from those claims. While many people see China as a controlled economy, it’s still in Wild West territory when it comes to Bitcoin. Lee stated that he’s seen magnifications in the Chinese Bitcoin exchange market of anywhere between 10-20x in recent weeks. He also stated that some other exchanges simply add 20k or more of artificial volume to their exchanges each day, and it’s easy to spot when you take a look at the daily charts. It seems that MtGox may not be the only exchange where manipulation is taking place on a regular basis.
Tuur Demeester has had great coverage of the CoinSummit event on Twitter, and I definitely recommend following him for future updates.