Will Digital Currencies Like Bitcoin Force a Secondary Currency Exchange?



Bitcoin-coinsContent provided by Dave Hellowell, on behalf of 4x Currency, specialists in foreign exchange and international money transfers.

Although Bitcoin has suffered a major blow with the apparent closure of the Mt. Gox exchange, it seems that the alternative currency has not died any kind of final death just yet.

Under plans now announced by Robocoin, a company based in the U.S., investors will actually be able to buy and sell bitcoins from a cash machine based in London.

This means that transferring funds to or from a virtual wallet, with the use of a smartphone which is scanned by the machine, means that people will be able buy or sell money by transferring cash through the machine.

If physical technology is being deployed to serve the ever popular currency, could we soon see a time where there shall be a legitimately stock exchange for Bitcoin and other such digital entities?

Bitcoin has often been viewed as a digital gold of sorts and as a consequence, the currency has long been a regulatory headache for some of the world’s leading financial organisations.

In fact, earlier this month, it was announced by New York’s financial regulator on how currency firms in the state will protect consumers and combat money laundering.

Benjamin Lawsky, the superintendent of New York’s Department of Financial Services said that, “Our objective is to provide appropriate guard rails to protect consumers and root out money laundering—without stifling beneficial innovation.”

In addition Lawsky stated that most virtual currencies have public ledgers which, when combined with know your-customer guidelines, could serve as anti-money laundering controls.

But on the basis of laundering alone, is it worth spending millions on an alternative market?

The trouble of course, is that alternative currency exchanges are often viewed as the centrepoints of money laundering.

Only last year the U.S., in conjuction with Costa Rican authorities and Spanish Police, shut down and arrested the founder of Liberty Reserve. S.A., a private digital currency exchange based in Costa Rica.

U.S. authorities accused the currency exchange of facilitating $6 billion worth of money laundering, deeming it to be nothing other than a “bank of choice for the criminal underworld.”

To hamper prospects further according to Vitalik Buterin of Bitcoin Magazine:

“In 2011, Liberty Reserve, together with Dwolla, was one of the main methods of moving money into Bitcoin exchanges to buy bitcoins, and can be credited as being one of the chief enablers of the Bitcoin economy’s early growth at the time.”

Unfortunately, being that the that the ensuing case was described to be “the largest international money laundering prosecution in history” by U.S. prosecutors, the prospect of having a legitimately governed exchange is bleak.

 

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Image courtesy of Wikipedia

Comments

  1. says

    I think BitCoins are just a bubble that will go away. Governments will crush them if they get too popular because it will threaten their control.

  2. says

    I think BitCoins are just a bubble that will go away. Governments will crush them if they get too popular because it will threaten their control.

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