Bitcoin was one of the technological-financial phenomena of 2017. The exorbitant growth of the cryptocurrency during the past year placed it in the mouth of half the world, even in those who had barely heard of it before. The constant ups and downs of its value, however, have created some uneasiness among traditional political and economic powers. And when that happens, the next step is always the same: regular.
The Union does not trust. The recent movement of France and Germany in the G20 to test a global regulation of Bitcoin and other cryptocurrencies has been seconded, quickly, by the European Commission. "We do not exclude the possibility of doing it at a European level if risks emerge for which there is no clear international response," said his vice president, Valdis Dombrovskis. The idea is very simple: Bitcoin can be dangerous and volatile.
Why regulate it The European Union tends to regulate any financial market. Even more so if it aims to establish a parallel currency system that, in a certain way, generates concerns for the states. For Berlin, Paris and Bitcoin company represents a problem for several reasons. Its opacity (transparency is low) can encourage fraud, money laundering or criminal operations of all kinds (especially terrorists). Hence, they want to limit their movements.
How to regulate it It is the million dollar question, in any case. At the moment few governments have shown excessive concern, and some, like the Spanish, have interpreted Bitcoin with good eyes. In Wired propose some ideas to control the flow of cryptocurrencies: from new laws that clarify and regulate their taxes to a strong control and supervision of the State of the "exchanges", the markets where currency transactions are made to cryptocurrencies.
Unlike other financial markets, cryptocurrencies have operated so far away from the government radar. For a State, that is always bad news.
The race for regulation. The EU has been the most vocal to date in the West, but there are several countries that have already felt the terrain of regulation. India, for example, was unveiled with a threat of prohibition never specified that, a priori, would have prevented trading Bitcoin within the country. South Korea leaked similar rumors previously. They can be interpreted as balloon probes, but have coincided (or have caused) with the free fall of Bitcoin.
Fear, volatility. In part, the Bitcoin problem has been its unstable market. Tremendous climbs have happened, without exception, drastic drops. After a stellar 2017, all crypto currencies have started the year depressed. It is a fertile ground for speculation, and in a market dominated by secrecy, full of inexperienced economic agents and underground, the long-term results can be disturbing. For governments, prevention is better than cure.
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