Bitcoin Global News (BGN)
January 28, 2019 -- ADVFN Crypto NewsWire -- Now roughly a
decade from the creation of Bitcoin, the idea of digital currencies
are still extremely confusing to the general public, and the
sentiment overall does not align with the intended purpose of the
technology. These issues pervade governments around the world as
well. Some countries have put in the time and effort to establish
definitions for terms such as digital currency, cryptocurrency,
virtua currency and the businesses that handle or deal in
them.
However in the United States, this
continues to be in an issue. Four of the major financial regulatory
bodies in the country have established contrasting definitions for
cryptocurrencies since 2013.
-
2013 - The Financial Crimes
Enforcement Network - Currency
-
2014 - Internal Revenue Service -
Property
-
2015 - Commodity Futures Trading
Commission - Commodity
-
2017 - Securities and Exchange
Commission - Security
From these choices, it’s clear that
there is a struggle for power over the new technology. Each
department designated a definition that puts digital currencies
within their range of jurisdiction. But in the end, the biggest
issue is that peer-to-peer, open-source cryptocurrencies such as
Bitcoin simply don’t fit into any of these established definitions.
They are truly novel financial, technological and cultural
instruments.
Pennsylvania Takes a
Stand
In one U.S. state, a major step has
been taken to curb the confusion regarding cryptocurrencies. The
Money Transmitter Act Guidance for Virtual Currency Businesses was
recently released by the The Pennsylvania Department of Banking and
Securities (“DoBS”). The guidelines were developed in response to
increasing inquiries to the department about related activities,
beyond what their services could hand. By establishing firm
guidelines, the state government hopes to reduce the workload and
confusion for all involved.
Money Transmitter
Act
The “MTA” is most concerned with
virtual currency exchanges, but in the process of developing
requirements for these businesses, the broad definitions for
cryptocurrencies is touched on in the documentation. The act begins
with the root of the financial industry by the question “What
Constitutes “Money” Under the MTA?”
“The MTA defines “money” as
“currency or legal tender or any other product that is generally
recognized as a medium of exchange.” Additionally, Pennsylvania law
has defined money as “[l]awful money of the United States” and “[a]
medium of exchange currently authorized or adopted by a domestic or
foreign government.” See 1 Pa. C.S. §1991; see also 13 Pa. C.S.
§1201(b)(24). Thus, only fiat currency, or currency issued by the
United States government, is “money” in Pennsylvania. Virtual
currency, including Bitcoin, is not considered “money” under the
MTA. To date, no jurisdiction in the United States has designated
virtual currency as legal tender.”
Because of this definition, the MTA
does not recognize cryptocurrency exchanges as money transmitters,
making them legal in the state. This applies to Bitcoin or other
cryptocurrency ATMs as well - referred to as Virtual Currency
Kiosks”:
“There is no transferring money
from a user to another user or 3rd party, and the Platform is not
engaged in the business of providing payment services or money
transfer services.”
By: BGN Editorial Staff