Will Bitcoin be regulated in 2013?

Earlier in December, a European bitcoin exchange said it had been granted “payments service provider status” by French government officials. In other words, the French government considered the exchange to be like Paypal, or similar services.

The exchange is called Bitcoin-Central. The status allows them to seek protections against loss from fraud, among other legal “perks.”

This sparked a good deal of controversy within the active bitcoin community. It puzzled me, at first, because I would think that governments would want to stop bitcoin — I’d expect to see more of what we saw within the U.S. government this past year, decrying bitcoin as a currency for drug dealers and other black-marketeers.

Here’s the worry: If members of the political class cannot stop bitcoin for being used, they can seek to regulate it. This would undermine one of the points of bitcoin. It was meant to be an unregulated currency; it was meant to put purchasing power back into the hands of you and me, and to distance such power from politicians, unelected government officials, and corporate bankers.

On the other hand, this could be a sign that the digital currency is gaining acceptance. But does it need acceptance or recognition from government agencies?

“Here’s the real issue — regulation in this context is only a bad thing if it leads to crony capitalism or if it suggests that ‘still-in-beta cryptographic play money’ bitcoin requires regulation similar to a national political currency.”
– Jon Matonis, Forbes.com

In my opinion, this is something to watch out for as the use of bitcoin continues to spread. However, I doubt that use of bitcoin could be successfully regulated.

Agree or disagree? Share your thoughts in the comments section…

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@datelinezero As far as I can see first they will go after exchanges but even that is not going to be easy since exchanges are not concentrated in one country. That is why the local exchanges should be focused on and supported.

@FlipPRO What does "regulating" bitcoin even mean? Requiring more AML on the exchanges, requiring people to report all of their addresses to the government and making it illegal to send to an unreported one, explicitly declaring Bitcoin stocks and gambling to be legally equivalent to their USD equivalents? There are a million ways to "regulate" Bitcoin, and they all have very different consequences.

@datelinezero Even if they tried to regulate it it's going to be impossible for them to take it over.