The regulation of Bitcoin and digital currency will be debated upon in France, as the government is taking the risk of money laundering and terrorist funding very seriously. Although there is little to no proof to back up these claims, authorities feel the need to debate further on Bitcoin regulation. Bitcoin’s public image of being a currency used primarily by Internet criminals is rearing its ugly head once again.
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French Senate Ponders Over Bitcoin Regulation
While the efforts by the French Senate to combat terrorism and organized crime are commendable, the decision to make Bitcoin regulation more strict could end up hurting the local economy more than anything. Although this topic is still in the discussion phase right now, the rise in popularity of Bitcoin and other digital currencies has not gone by unnoticed.
The main purpose of this revised Bitcoin regulation is determining whether or not Bitcoin transactions would be subject to taxes. Given the European Union’s current stance on digital currency as a monetary unit exempt from taxation, this proposal by the French Senate seems rather strange. At the same time, taxing Bitcoin would elevate Bitcoin to the status of “currency” in France, which would bring more legitimacy to this ecosystem.
Moreover, exchange platforms dealing with Bitcoin and other digital currencies will need to report to Tracfin – an entity which has always been in favor of Bitcoin regulation – and keep more detailed logs of all customers. Doing so would allow government officials and Tracfin to identify financial fraud and money laundering attempts a lot quicker.
The French Senate is not the only governmental body in the world to assume. Bitcoin is being used by internet criminals and terrorists, even though there is no concrete evidence to back these allegations. This new proposal should spark a debate in the Senate about Bitcoin regulation in general, and which changes could – or should – be made to the current guidelines.
However, there are those who oppose the proposal as well, considering how Bitcoin exchanges are already complying with European AML and KYC guidelines. All users need to go through an identity verification process by submitting a scan of a government-issued ID and a proof of residency. Additionally, all exchanges are obligated to report any suspicious activity to Tracfin, rendering this entire proposal rather moot.