Federal Reserve has no authority to regulate Bitcoin, according to Chairwoman

[Crow]

According to the new Fed Chairwoman Janet Yellen, the central banking system has no authority over Bitcoin. In testimony before the Senate Banking Committee she said that, "this is a payment innovation that is taking place entirely outside the banking industry." Without a central issuer or operator it's incredibly difficult to successfully regulate and supervise these types of currencies. Don't think that Bitcoin is untouchable, however. Yellen went on to say that, "it certainly would be appropriate, I think, for Congress to ask questions about what the right legal structure would be for virtual currencies that involve nontraditional players."

Legal efforts to restrict Bitcoin have already taken off in other countries, and Senator Joe Manchin (a Democrat from West Virginia) has suggested banning the crypto-currency in the US. While an outright ban of Bitcoin seems unlikely given its growing acceptance, Japan's Ministry of Finance has indicated that it could work with other nations to establish a set of international regulations. If a set of rules could be agreed upon at an international level, it could prevent people from taking advantage of loopholes that only serve to encourage instability and abuse.

The public posturing and legal wrangling is hardly surprising following the shutdown of Mt. Gox, the largest Bitcoin exchange in the world. The firm currently holds 744,000 Bitcoins (roughly $423 million), and the future of those funds is shaky at best. Whether or not the currency continues its ascension to legitimacy may rest on the results of the Fed's investigation into Mt. Gox. But it seems increasingly likely that the government will step in to put some restrictions on Bitcoin, sooner rather than later.

Source

[DanF]

There is no question about your summation. The US government will regulate if not try to ban the use of Bitcoin.

The reason does not so much have to do with protecting the public from loss and/or disruption of transfers but more to do with not allowing monetary transactions to "legally" occur where they have no control over taxation and preventing illicit activities now "somewhat" under their eye.

Yes it will be "sooner rather then later".

But then again the internet and those who are brilliant in the use of it will always try to keep one step ahead of governments that try to stifle it.

Dan

[trebli]

The reason does not so much have to do with protecting the public from loss and/or disruption of transfers but more to do with not allowing monetary transactions to "legally" occur where they have no control over taxation and preventing illicit activities now "somewhat" under their eye.


Dan

Exactly! Control and taxation. That is what all governments, including our own, thrive on.

[BadAxe]

There is no question about your summation. The US government will regulate if not try to ban the use of Bitcoin.

The reason does not so much have to do with protecting the public from loss and/or disruption of transfers but more to do with not allowing monetary transactions to "legally" occur where they have no control over taxation and preventing illicit activities now "somewhat" under their eye.

Yes it will be "sooner rather then later".

But then again the internet and those who are brilliant in the use of it will always try to keep one step ahead of governments that try to stifle it.

Dan

They ain't stopping jack. Its why BTC was invented. Most of its done through TOR browsers and such, with total anominity. They can put their laws into place, they can try to regulate, they can tell the country they are doing their job, while BTC will continue, and those in the know will continue to amass and spend them. BTC are here to stay.

[DanF]

They ain't stopping jack........... BTC are here to stay.

You are 100% correct!

But here is what can go down.

The governemnt's war against tobacco which has been a long slow process (which has decreased it's wide spread use) is doing as intended. They are still working on reducing consumption even further.

The government will never take away the 2'nd Amendment. But what they can do (and it may be coming) is to always allow citizens the right to buy and own firearms but slowly cripple the amendment by making gun owners pay $25.00 per round for ammo. There are plenty of citizens who will push the government for our rights to be made impossible to enjoy.

Now to BitCoin.

Yes you are correct. There is Tor and the Dark Net. But the government has ways to cripple the use of BitCoin in the USA.

And the way is this. Inform the public that those who accept that digital currency (business' and consumers alike) that because they may be doing so to avoid taxes and other illicit purposes that the Internal Revenue Service will have to look very closely each year at their tax reporting.

They have already done this with the Tea Party. And they know that the IRS can put the fear into any living soul in this country. Sic the IRS on you every single year and even the bravest will cower.

So....can they kill BitCoin?

No! Can they structure a program to make the wide spread use of BitCoin very burdensome and threatening to the general public?

Yes!

Dan

[DanF]

Can BitCoin kill you if you lose?

http://bit.ly/1l0o0fA

Dan

[BadAxe]

So....can they kill BitCoin?

No! Can they structure a program to make the wide spread use of BitCoin very burdensome and threatening to the general public?

Yes!

Dan

When done right, the IRS can not even know if you have dealt with Bitcoins. So thats no fear whatsoever.

Also, Overstock.com just surpassed $1 million in sales from Bitcoins. Bitcoin ATM's are popping up. Nope, try as they may, and scare as they may, they got nothing. Alt Curtrencies will find more and more ways to stay anonymous and all the gov't will be able to do is make stupid people scared.

[DanF]

When done right, the IRS can not even know if you have dealt with Bitcoins. So thats no fear whatsoever.

Also, Overstock.com just surpassed $1 million in sales from Bitcoins. Bitcoin ATM's are popping up. Nope, try as they may, and scare as they may, they got nothing. Alt Curtrencies will find more and more ways to stay anonymous and all the gov't will be able to do is make stupid people scared.

Great post! I'm with you!

But you do need to get a letter in the mail from the IRS requesting a time and place when they can sit down with you to "go over a few things".

And many very "stupid" people have gotten that letter over the years and ended up not only in the newspapers but with a complete change of perspective on things. Ask Willy Nelson the next time you see him.

When you get to the point where the IRS does not concern you then you truly have beat the system.

Dan