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Florida Ruling Denying Bitcoin Is A Currency Draws Mixed Reactions

Last Updated March 4, 2021 4:50 PM
Lester Coleman
Last Updated March 4, 2021 4:50 PM

Bitcoin experts gave different reactions to the Florida court ruling last week that bitcoin is not currency, according to CNBC , including the view that the ruling doesn’t have much impact on the cryptocurrency’s future.

Florida judge Teresa Pooler dismissed felony charges against Michell Espinoza who sold bitcoins to an undercover detective. Pooler ruled that bitcoins are not tangible wealth. She noted bitcoins cannot be hidden under a mattress like gold bars and cash. The prosecution charged Espinoza with violating an anti-money laundering statute.

Judge: Bitcoin Not There Yet

Pooler said it is clear that the cryptocurrency has a long way to go before it is the equivalent of money.

Christopher Burniske, the blockchain products lead at ARK Investment Management, a financial services firm, said the judge failed to give bitcoin its due credit. He said the cryptocurrency is near fulfilling the same roles as money in that it is a unit of account, a means of exchange and a store of value. Bitcoin may not be the same type of money, and it may be unique, he said.

Bitcoin is a technology that can do more than fiat currency, he noted. As such, it should be given the space it needs do grow and innovate as a new asset class.

Consultant: Bitcoin Is Currency

Vijay Michalik, a Frost & Sullivan research analyst, said the cryptocurrency clearly fits the specification of a currency. He said it’s a viable payment medium and exchange for a variety of transactions. He added that the cryptocurrency is fungible and has significant infrastructure and volume for currency exchange.

Anatoliy Knyazev, co-founder of Exante, an investment firm, said government agencies and courts will argue about the issue, but to a bitcoin user, the cryptocurrency is money.

The U.S. Commodity Futures Trading Commission classified bitcoin as a commodity in September of 2015 and began to clamp down on unregistered firms trading in bitcoin derivatives.

The German Finance Ministry in 2013 recognized the cryptocurrency as a “unit of account,” meaning it can be used for trading and tax purposes.

James Lynn, U.K. managing director of Billon Group, a payments startup, said the cryptocurrency is not backed by a government like fiat currencies are, which is an important distinction. He said it is closer to a commodity. He compared it to gold, which is not government backed, has a finite amount that can be mined, and its value is based on demand.

Also read: Bitcoin isn’t money, Florida judge rules in laundering case

Outlook Uncertain

Bitcoin has performed well this year as an investment. The price has risen to above $700 in June and is presently trading around $654. The value has increased by 50% in the past year.

Lynn was nevertheless cautious about the cryptocurrency’s future. He said he is bearish on its long-term outlook. He said the underlying technology is a “game changer,” but the currency has similarities to the 1660s Dutch tulip bubble.

Featured image from Shutterstock.