Uncategorized

Bitcoin Revolution to Pose Regulatory Challenges for SEC

Sarah Jenn | June 9, 2015 | 7:00 pm
bitcoin revolution, bitcoin decentralized, bitcoin bond, cryptosecurities
Uncategorized

Bitcoin Revolution to Pose Regulatory Challenges for SEC

Sarah Jenn | June 9, 2015 | 7:00 pm

One of the more notable features of bitcoin as a cryptocurrency is its decentralized nature, which means that there are no monetary authorities overseeing its use. For some, this has been appealing in that it paves the way for easier and faster transactions but others think that this just opens up the possibility of fraud.

This has been one of the major issues that financial regulators have grappled with in the past years as the bitcoin rose to fame. Some governments and states have come up with their own regulatory framework for the cryptocurrency, which some believe might stifle progress. However, the bigger challenge for them is that bitcoin is starting to render financial regulation irrelevant.

Bitcoin Revolution in Trading

One example is the recently announced bond offering of Overstock, an online retail giant. What makes this particular bond offering unique is that it will be using bitcoin-based technology and that it will be traded on a decentralized exchange using the company’s Medici platform.

With this platform, investors can bypass the traditional clearing houses associated with trading securities. SEC already granted approval for Overstock to deal in digital securities or cryptosecurities.

This marks the company’s move to create a digital security exchange that isn’t just regulated by a single entity in a particular place. Instead, the network would span the entire globe, making it more secure and immutable. This could remove the need for financial regulation, as the network of computers could conduct the check and balance for transactions.

Industry experts believe that bitcoin could revolutionize the financial industry in this regard, enabling people to trust the network or blockchain protocol instead of relying on individuals or institutions. “For the first time in human history, we can have peer-to-peer exchange where trust is not an issue,” said Overstock CEO Patrick Byrne.

 

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