Icelandic government warns against Auroracoin

Christoph Marckx @cryptomaniacs
March 14, 2014
Pétur Blöndal warns Icelandic people for the risks of virtual currency Auroracoin.

Early this morning, the Auroracoin medium of exchange was discussed by the Economic and Trade Committee of Parliament. The Icelandic authorities expressed their concern about the currency, calling it risky business. They claimed that consumers needed to be educated and warned of the risks this virtual coin may pose. Pétur Blöndal, member of Parliament for the Independence Party and vice-chairman of the Committee, had little details to disclose but said there was an agreement regarding the fact that using the medium of exchange held great risk for everyone.

It seemed there were many things unclear and the launch of the coin seems to bring multiple issues to the table. The Committee was especially concerned about taxation. It’s difficult to work this out since politicians around the globe can’t seem to find a solution for taxing cryptocurrencies. Next to taxing, Blöndal also felt that the concept the coin was dangerous. The developers behind the medium had promised a limited supply, but according to Blöndal people had to blindly trust that this would not be changed. There was also a concern about how property rights were protected? To enforce his opinion, he claimed that it has been shown that Bitcoin has no real protection for rights of individuals.

“What is missing is that consumers be warned against this cryptocurrency,” said Blöndal. In ten days time, Auroracoin’s 50% premine will be distributed among all Icelanders.

But what will be the final verdict on Auroracoin? Will the government take special measures or just look at the launch from a distance, ready to intervene when necessary? According to Blöndal, representatives of the Central Bank of Iceland were present during the meeting. They were discussing if the cryptocoin could be deemed illegal and how the authorities could respond to this. There was an in-depth diagnosis of measures taken by other countries. The Bitcoin movement has received lots of bad publicity lately, and some other countries have been putting restraints on the cryptocurrency and even banning it. Up until now, nothing has been decided regarding the Central Bank’s stance towards Auroracoin.

Blöndal says that people have to realize that Auroracoin is not backed by anyone other than its developers.  “Currencies exist in many different forms, but this one is an example of a currency that is not backed by any government. We have laws regarding currencies, and they do not apply to this exchange method.”

Iceland has seen a few rough years, but they managed to stand up again because of their ‘alternative’ handling of the financial crisis. It was only a matter of time before people would come up with their own solutions, looking at the causes of the crisis in the first place. The whole world is, slowly but surely, starting to realize that fiat money can’t survive in its current form. The initiation of Bitcoin and other cryptocurrencies has shown that there can be another way. As usual, governments want to regulate but this takes a long time and the world doesn’t want to wait any longer. There’s potential danger to virtual money, denying this would be naive. On the other hand, there’s also an opportunity in it. Iceland is the first example of how a cryptocurrency might do something for one nation. In ten days, Auroracoin will make its airdrop and Icelanders will receive their coins.

Christoph Marckx @cryptomaniacs

Internet addict and virtual currency aficionado living in Belgium. I work in a school, where I am responsible for every computer and the entire network that keeps our students connected to the world. I love cryptocurrencies, mostly because it gives us a chance to take back our freedom. If we do this right, there are exciting times ahead!