One of the many questions surrounding bitcoin that is rather difficult to answer is whether or not it is a currency. One federal judge determined bitcoin is money last year, whereas a Buffalo judge feels it is not money. An interesting debacle, although it does nothing to help define bitcoin and other cryptocurrencies in the financial world.
It seems evident we will never get a proper answer to the question whether or not bitcoin is effectively money. Although it can certainly be treated as such, the US legal system seems rather conflicted on this topic. One judge feels bitcoin is money, another thinks it’s something else entirely. The lack of understanding of how bitcoin works or why it was created in the first place is rearing its ugly head once again.
US Magistrate Judge Hugh B Scott ruled bitcoin is not money at all. That is rather strange, considering the cryptocurrency was used a large-scale money laundering scale. However, according to Scott, bitcoin is a commodity, rather than a form of currency. This decision may not hold up for long, though, as the district judge will review the assessment, However, it does raise a lot of questions regarding the bitcoin world once again.
Bitcoin is not necessarily designed to replace traditional money, that much is evident. What it does well, however, is provide financial inclusion to people all over the world, something the traditional financial sector is seemingly incapable of right now. Cryptocurrencies represent a low-cost digital approach to transactions and operate in a far more secure manner than regular money ever will. Moreover, bitcoin can be a valuable ally in the fight against money laundering, rather than facilitate illicit behavior.
It is evident the differences between bitcoin and traditional fiat currency are a cause for confusion. Bitcoin is decentralized and not issued by a central bank. That in itself makes it rather difficult to comprehend for people in the legal system. Although bitcoin initially got a bit of a bad reputation, the vast majority of crime is still facilitated by what regulators define as money.
Rest assured cryptocurrency will continue to cause a divide between government officials, legislators, and policymakers. It is impossible to slap a standard definition on a form of currency the world has never seen before. Bitcoin may not be money, but that can be a good thing as well. In fact, cryptocurrency has far more potential than traditional money has right now.
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