Bitcoin’s Russian Problem, Eulogy And New Supporters

Western Union just put its toe in the bitcoin/blockchain waters. It announced an investment in Digital Currency Group, a bitcoin/blockchain startup-focused investment firm, which includes former Treasury Secretary Larry Summers, who is serving as an advisor and also put money up. This comes at a time the investment company is attempting to focus more on blockchain than bitcoin itself — a common theme in the industry. The details remain under wraps, but as it was explained by David Thompson, Western Union’s chief technology officer, its involvement is to “keep our eye on innovation.” Western Union is also running a pilot program with Ripple. Summers himself has been vested in bitcoin for nearly two years. “I am someone who believes in the capacity of technology to take out friction,” Summers told The Wall Street Journal. “That’s the high purpose of finance: to facilitate exchange rather than speculate.” Russia Tightens Anti-Bitcoin Laws It’s well-known that Russia’s lawmakers aren’t bitcoin lovers. As has been reported, the country has been working to tighten its laws to keep bitcoin activity illegal. Now, however, that plan seems to moving ahead full steam. This will include a formal legislative proposal next month from the Finance Ministry in Moscow that will attach some steep punishments for anyone using digital currencies. This includes fines up to $38,000 (2.5 million rubles) and prison time of up to seven years. Holy Siberia, Batman. “Bitcoin can be used to finance the shadow economy and crimes, and this risk we cannot allow in the Russia’s financial system, which we are striving to make transparent and healthy,” the press service of the central bank said in an email, according to a Bloomberg report. Russia hates cash, which is what most people still use. It dislikes the anonymity of cash. Bitcoin, of course, takes anonymity to an entirely different level, and while Russia can’t outright ban cash, it can make it painful for the digital cash equivalent to exist. “We can see how swiftly, pretty much over the course of the year, this became a reality of our economic life,” Deputy Finance Minister Alexey Moiseev said in an interview with Bloomberg. Bitcoin, “in its essence, is a money surrogate, so ultimately, that leads to the central bank losing control over the money supply.” And, on that point, we agree. EU Backs Off Regulating Blockchain The European Union has decided it won’t take a formal stance on regulating blockchain, at least for now. According to the EU parliamentary committee, now is not the time to regulate. Instead, the group determined it was best to keep a watchful eye over the technology that underpins bitcoin without being overarching. That’s one way the group can determine what the next best step is, while still allowing innovation. “We don’t want preemptive regulation, but we do want precautionary monitoring,” Jakob von Weizsaecker, a member of the European Parliament, told Reuters. This report was also supported by the parliament’s economic affairs committee. The biggest push, both in the U.S. and across Europe, has been to see where and how blockchain’s tech could be implemented in a way that makes financial services faster, cheaper and more effective. This includes things like payment transactions and stock trades. The unknowns, of course, have left regulators worried that it’s too early to set rules for a technology that has not been fully explored. “One reason why regulating now in detail would be difficult is that we don’t know yet what the most important use of blockchain might be,” von Weizsaecker told Reuters. Bitstamp Gets EU Stamp Of Approval Bitstamp has stamped its name in the record books in the EU for being the first company of its kind to secure a national license to operate as a bitcoin exchange. The company was awarded a license by the Luxembourg government, which recognizes it as a fully regulated, licensed exchange. “This is an unprecedented moment for the bitcoin and brings with it a new era of security and transparency to the industry,” the company wrote on its blog. Bitstamp explained that achieving the license was part of a “rigorous application process” through financial regulators that took close to two years. That included security reviews and audits. But now, Bitstamp’s license gives it access to operate across 28 EU Member States, providing all European customers with its bitcoin trading platform. “Establishing our EU base in Luxembourg, a country that is known for its longstanding history as an international leader in ePayments and data privacy, as well as the European headquarters for many global players, including Amazon, PayPal and Skype, Luxembourg embodies an exceptionally strong infrastructure and the financial and security awareness we were seeking for this process,” the company wrote. ‘Bitcoin Is Dead’ — Again? Sure, there are plenty out there who want to put a fork in bitcoin. But is bitcoin really dead? It depends who you ask. And that’s why this debate won’t be going away anytime soon. The latest anti-bitcoiner to offer his eulogy is TransferWise CEO Taavet Hinrikus. Bitcoin, he points out, is on par with the gold rush, saying that “real people” weren’t using bitcoin. He also suggested that there’s no legitimate use case for bitcoin as it doesn’t solve any problems. “Bitcoin, I think we can say, is dead. There is no traction. No one is using bitcoin. The bitcoin experiment, I think we can say, is over,” he said. But, like many others, he still has interest in the technology that powers bitcoin — the blockchain. “People bought bitcoin because they thought it would be worth more tomorrow. And a lot of people got lucky. But we’re not seeing real people use bitcoin. And we don’t know what problem it solves,” he said in a recent interview. “Now, blockchain, I think, is a genius advancement in technology. But I’m not sure we’re seeing yet where to apply it. I’m pretty excited about R3 and Digital Asset Holdings. I think there are many areas where using blockchain is great, but it’s still early days,” he added. Buying Bitcoin Now Instant Buying bitcoin hasn’t always been the easiest — nor getting the funds instantly into an account. But now, Coinbase has announced that it has made it easier to buy bitcoin with any U.S. bank account simply using a debit card. What this also means is that users can instantly buy bitcoin using all bank debit cards in the U.S. Previously, those who wanted to buy had to first make two deposits, wait five days and then the money was sent to a bitcoin wallet. The company only allowed instant purchases for those who had a credit card linked to verify a backup payment option. Now, however, it looks like the friction of bitcoin buying just got easier. At least for Coinbase users. Now, if there were only places to use it.