All eyes are on New York. Since the New York Department of Financial Services published their BitLicense proposal on July 17, the bitcoin community has been scrambling to provide comments to their severely inadequate 45-day comment period. The BitLicense proposal is 40 pages of regulations that are broad based and have the potential to choke out small business and stifle further innovation to blockchain technology. New York often sets the stage for federal and other state financial pubic policy so it is imperative New York gets this right. Last week I spoke at the NY Bitcoin Center at length on this very issue, CoinTelegraph has the interview.
What can you do?
Sign the Chamber of Digital Commerce petition asking Superintendent Benjamin Lawsky, to extend the comment period through the end of 2014.
The Digital Chamber also encourages submitting personalized comments directly to NYDFS Office of General Counsel Dana V. Syracuse, New York State Department of Financial Services, email: .
Here’s a not-so-boring week in bitcoin:
Government Initiatives:
NYDFS Willing To Extend BitLicense Public Comment Period
A spokesperson for the New York Department of Financial Services (NYDFS) said their office would be open to extending the public comment period on the controversial proposed BitLicense regulations. This is hopeful news for many bitcoin activists, who believe the current 45-day comment period is too small a timeframe to pass such monumental regulations.
The NYDFS statement comes on the heels of multiple, widely-supported calls for an extension. Since the public comment period opened on July 23rd, the NYDFS office has already received thousands of comments on their proposed regulation. Both regulators and Bitcoin enthusiasts will need to work together to ensure both sides interests are protected. In the meantime, despite their openness, the NYDFS says they’ll march on ahead as planned.
US House Congressmen Host ‘Bitcoin Demo Day’ On Capitol Hill
Last week, Rep. Jared Polis (D-Co.), Rep. Mick Mulvaney (R-S.C.), and Rep. Bob Goodlatte (R-Va.) co-hosted a Bitcoin Demo Day for US Members of Congress and invited various Bitcoin startups to come help explain Bitcoin to their colleagues. Coinbase, BitPay, BitGO, and Expedia all sent representatives to participate. This is what’s called “advocacy” or education type work, which is important. This industry still needs formal representation in Washington to set up firewalls to mitigate political and regulatory risk. As lawmakers become more familiar with digital currencies, they may be more open to input from the industry in regards to regulation.
Argentina’s First Bitcoin Exchange’s Bank Accounts Closed
Last week, Unisend, Argentina’s first Bitcoin exchange, received written notice of account closures from their banks. The Argentinian subsidiaries of Santander bank and Galicia bank informed Unisend of their account termination, but did not provide a reason why. Last month, the Argentina’s Financial Intelligence Unit passed a resolution that would require all financial institutions to report digital currency transactions to counter money laundering and terrorism efforts. The new law went into effect on August 1st.
Russia’s Ministry Of Finance To Introduce Bill Banning Bitcoin
According to Russian news sources, the Ministry of Finance said they were in the process of drafting a bill to ban digital currency. The proposed bill will amend existing laws to specifically allow Russia’s Central Bank to ban digital currencies such as bitcoin. In addition, Russia plans to block websites that allow users to buy, sell, or use non-Russian virtual currencies. According to WSJ, earlier this year, Russia’s Central Bank announced that it would not block Bitcoin usage.
French Senate Considers Different Countries’ Bitcoin Regulations
The French Senate has recently released a report titled, Regulation in the face of innovation: public authorities and the development of virtual currencies. France’s Minister of Finance, Michael Sapin, has stated that France’s approach to Bitcoin regulation will be “halfway between the strictest regulations [from] China, Japan or Russia or the lightest regulations adopted by countries such as the United States, Canada or Israel.” Specifically, the report suggests that Bitcoin regulatory framework should be built with all of Europe, if not all of the world, in mind.
Industry Analysis:
Visa Flip-Flops On Bitcoin
Visa’s CEO Charlie Scharf said the credit-card giant is able to accommodate bitcoin. This comes several months after Visa’s CEO Charlie Scharf said bitcoin was not a significant threat to him, “Visa is not a currency, it’s a network. We can process real or virtual currencies to the extent that it makes sense…but we are not thinking about it today.” As more and more trusted brands begin accepting bitcoin, like Dell and New Egg the financial services giants are being to take bitcoin seriously.
Update on Silk Road Defense Case Calls Search “Indiscriminate Rummaging”
Ross Ulbricht, the man charged with operating Silk Road, an online marketplace for illegal drugs, says his Fourth Amendment rights have been violated. At least his lawyers think they have. They want the judge to throw out most of the evidence brought against Ulbricht, which they say was indiscriminately rummaged through. “The wholesale collection and study of Mr. Ulbricht’s entire digital history without limitation — expressly sought in the warrants and granted — represent the very type of indiscriminate rummaging that caused the American colonists so much consternation,” according to the papers filed late Friday in federal court in Manhattan.
Xapo Ships And Addresses Fee Confusion
Xapo (the most well funded company in bitcoin) began shipping their much anticipated debit cards last week, but not without one small hiccup. Their somewhat complicated fees and limits schedule caused skepticism among a few reporters about the terms of services. Xapo quickly clarified the issue in a blog post, stating they do not “intend to charge monthly fees or fees for everyday spending.” Disclaimer: ATM fees are still possible since they also apply to bank-issued debit cards.
Debit and credit cards are highly regulated. There is a lot of red tape Xapo has had to cut through to offer this product to the community. There are bound to bumps along this road, but Xapo is greatly contributing to the long-term acceptance and use of bitcoin.
PlayersAuctions Accepts Bitcoin With Coin.co
PlayersAuctions, one of the largest gaming marketplaces has partnered with Coin.co, a bitcoin payment processor based in New York, to accept bitcoin. The gaming company is a peer-to-peer exchange for gamers, who purchase everything from really awesome gaming chairs to virtual assets.
“As a tech-savvy sector, both video gamers and innovative companies like PlayerAuctions are realizing great benefits of utilizing and accepting Bitcoin.Coin.co and PlayerAuctions are happy to be making bitcoin as a payment option available to this market,” said Brendan Diaz, CEO of Coin.co.
PlayersAuction fits right in with the bitcoin community, as gamers were some of the first people to use the digital currency. Example: hardcore gamers turned their graphics cards into mining machines before new ASICs bitcoin hardware became available.
Stellar
Jed McCaleb (original founder of Mt Gox, co-founder of Ripple Labs) just unveiled his ‘secret bitcoin project’ called Stellar. Stellar is “a decentralized protocol for sending and receiving money in any pair of currencies.” Basically, this means a user in Europe can send Euros and have a recipient in Mexico receive Pesos. Stellar is very Ripple-like but hits what Ripple missed on in terms of allocation; however, that could mean they could face funding problems that could hinder future development.
Coinapult Locks
Panama-based wallet service provider Coinapult has launched Coinapult Locks. ‘Locks’ are marketed at those who are afraid of deflation – they are the perfect Keynesian solution to bitcoin volatility. Users can peg the value of their bitcoin or “lock their bitcoin” to other assets such as the US Dollar, Euro or gold.
For example, if I “lock” my bitcoin at today’s exchange rate of $600 and if the exchange rate falls to $300, Coinapult would credit my account to two bitcoins. However, if I “lock” my bitcoin at today’s exchange rate of $600 and the exchange rate doubles to $1,200, I would now only have .5 bitcoin in my Coinapult account.
As someone that is long and bullish on bitcoin, I will not be utilizing this service, however, I will recommend it to those who think deflation will keep bitcoin from ever being a unit of account.
CheapAir.com Bitcoin Sales Top $1.5 Million
CheapAir.com, the first U.S. online travel agency to accept bitcoin (followed quickly by Expedia), has processed over $1.5 million in bitcoin payments. This includes things like flight, hotels and Amtrak fares. The company caught wind of the digital currency back in November 2013, after a customer asked if he could use it to pay for a flight. Lightbulb moment. We think he might be onto something…
Don’t forget to sign the Digital Chamber’s BitLicense Petition and submit personal comments directly to NYDFS Office of General Counsel Dana V. Syracuse, New York State Department of Financial Services, email: .
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