Should peer-to-peer decentralized virtual currencies become regulated by a governmental institution? This has been the ongoing debate for quite some time now, and it appears that governments are beginning to implement new rules and regulations that digital currency holders and businesses need to abide by.
In wake of the latest $84,000 bitcoin heist, Robert Beggs, CEO of Burlington, Ont.-based security consultancy Digital Defence and a founder of the Toronto Area Security Klatch (TASK) IT security user group, told ITBusiness.ca that it’ll be five years before all businesses accept bitcoin and other digital currencies, but regulations will need to be in place first.
Beggs recently outlined the benefits and disadvantages associated with bitcoin at a recent security conference. Although many would say that his presentation was neutral, he did highlight one important message that the bitcoin community needs to remedy: a paucity of trust.
According to Beggs, digital currencies aren’t fully regulated, the Canadian government is starting to assess bitcoin, the value has been known to be volatile – though in recent weeks it has remained relatively stable – and law enforcement agencies are concerned that cryptocurrency can be used for money laundering schemes, terrorism financing and other illicit transactions.
For instance, says Beggs, if you lose a wallet or a credit card then you can call the police to retrieve it. However, if you were to lose your bitcoin wallet then the authority will be rather indifferent to the entire ordeal.
The Canadian government recently introduced Bill C-31 that would institute a number of changes for the bitcoin community, including registering with a federal department, banks being prohibited from doing business with entities that have yet to register their company with the government and various other modifications.
Nevertheless, bitcoins will become fully regulated and legitimized in the near future.
“Right now there’s a driving need among the technologically savvy generation – your under-30s – for the mobility of their funds. They move, their jobs move, but what you’re not seeing is a banking system that is supporting this. It’s easy to have a bank account in one country, but if you move to another country, it creates a lot of problems. What people are looking for is a financial institution that’s cross border, that offers a consistent level of service that’s available from everywhere – you can get your data from everywhere, why can’t you get your money?” Heggs told the website.
“We have to move to a state where the tax system is in place to accept Bitcoin transactions, the large financial institutions are accepting them. I’m assuming it’s going to be at least five years before there is the credibility and the history [for business] to trust a digital currency.”
At the time of this writing, bitcoin is trading at just under $600.
