As previously reported on CCN, PayPal has taken steps forward to endorse Bitcoin as a form of online payments, and the integration of Bitcoin into PayPal’s payments services is going forward. Since PayPal and Bitcoin are global services, how Bitcoin is treated internationally is of great import to PayPal. Australia has a love-hate relationship going with Bitcoin at this very moment, and government officials seem somewhat confused on how to handle the most sophisticated form of funds transfer extant. The Australian Senate is still looking at Bitcoin, and many with a vested interest have submitted their views on the matter.
PayPal Counters Mastercard
Mastercard made news last year with a pre-emptive strike against Bitcoin through Australian authorities, seemingly threatened by Bitcoin’s potential to reduce transfer costs to consumers. PayPal has decided to enter the fray, and offer their defense of the burgeoning currency, which has excited and intrigued many in Australia to a great extent. Australia has quietly become one of the top Bitcoin markets in the world, especially in BTC per capita measures.
PayPal recently made a submission to the Australian Senate committee that is currently overseeing an investigation into the regulation of digital currencies. How can they, or should they, regulate the currency itself? Also how should companies that deal in Bitcoin be handled by the government, and how should taxes be metered out?
PayPal sent the Senate the following statement on the matter:
“While the currency itself should not be regulated, and transactions by individual users without the assistance of the intermediaries should not be regulated, companies that provide a financial service for digital currency transmission, for issuance or sale of digital currency, or for exchange with other currencies such as the Australian Dollar, should be regulated in a manner similar to the existing regulations that apply to other payment services… Those regulations, however, should be adapted to recognize the specific details of how different digital currencies work, particularly ‘decentralized’ digital currencies that are not controlled by a specific issuer.”
Furthermore, PayPal recommends to the Senate committee that Bitcoin and similar crypto-currencies be recognized as full financial instruments. Their exact words were:
“Technology neutral regulation is preferable to ensure innovation is not stifled.”
This missive is the direct opposite to what Mastercard submitted previously. Both have their own vested interests at heart, so it will come down how much freedom regulators afford to their citizenry. The United States and the United Kingdom have ruled in favor of Bitcoin use. Russia has chosen to attack Bitcoin, at least partially to protect their weakened Ruble. Ecuador have ruled to ban Bitcoin to instead create a fledgling national electronic cash system model. China has shown a general state of confusion in how they’ve handled Bitcoin to this point. Canada is also researching the situation, as they take advisory counsel from Bitcoin experts like Andreas Antonopoulos before moving forward, whose testimony sounds remarkably similar in tone to PayPal’s statements.
How should a country handle Bitcoin as a currency, and as a tax revenue stream? Should countries have any legal jurisdiction over a global currency outside of the government-issuance realm? Share above and comment below.
Images from PayPal, Denys Prykhodov and Shutterstock.