The growing Bitcoin adoption and the popular cryptocurrency’s performance this year has got governments rallying to introduce cryptocurrency regulations in their respective jurisdictions. These attempts have received a mixed reaction from the community as a poorly drafted law can spell the doom of Bitcoin and businesses that are using the cryptocurrency to develop innovative solutions. Similar concerns are now being voiced by the Bitcoin Foundation as the Uniform Law Commission sets to meet and decide upon cryptocurrency legislation in the United States.
The Uniform Law Commission is presently in the middle of framing cryptocurrency laws that can be implemented by a majority of US states. As they proceed, the major Bitcoin advocacy organization, Bitcoin Foundation seems to have found few issues with the draft, which if passed might end up stifling innovation and putting the cryptocurrency companies and users into several hardships. In order to prevent such a catastrophe, somewhat along the lines of what happened when BitLicense was introduced in New York State, the executive director of the foundation has appealed to the policy makers.
The appeal, in the form of a letter, addressed to the National Conference of Commissioners on Uniform State Laws, has Llew Claasen and other prominent personalities from the industry asking the members of the commission to refrain from adopting the “Uniform Regulation of Virtual Currency Businesses Act,” in its current form. The letter states,
“We understand that you may be asked, during your meeting in San Diego, to approve a proposed uniform statute “Uniform Regulation of Virtual Currency Businesses Act.” The Bitcoin Foundation urges you not to adopt this proposed model act. Approving the act in its current form will discourage inclusive financial innovation arising out of blockchain technology and cryptocurrencies like Bitcoin.”
Claasen goes on argue about the validity of the draft legislation in his blog post, where he states studies that have found virtual currencies to be more helpful in combating terrorism and crime instead of facilitating it. Also, he points out various inconsistencies with the draft law, particularly when it considers virtual currency businesses as equivalent to money transmission businesses while failing to recognize Bitcoin and other cryptocurrencies as money, and so on.
It is quite evident that the regulators are hurrying to hold cryptocurrency users and businesses accountable to the laws of the land, and also get them to cough up their share of tax money. But, a wrong move, made in a hurry might cost the country its position on the future global economy.