Regulators face cross-jurisdictional challenges in regulating Bitcoin and other virtual currencies
By Jessica Meek , Risk.net
Edmund Moy, former director of the US Mint, points out that Bitcoin can be seen as a currency, but it is also a medium of exchange, a payments system and ultimately, a technology.
“At its core Bitcoin represents a technology that enables a whole new payment system to be developed. Former Federal Reserve chairman Ben Bernanke said that more than Bitcoin as a currency, Bitcoin represents a promise of a more secure, safer and cheaper payments system than those we currently have.”
He explains that banks have effectively built a legacy transfer system that is expensive to use, and, while MasterCard and Visa have also tried to develop something more efficient, “they can only get cost down to 3% or 4% of every transaction. PayPal has also tried to create something, but there are costs involved. Bitcoin represents the next generation of how payments flow through the internet – it is the equivalent of Google developing Gmail so that people could email for free and not have to pay for email services from companies such as AOL.”
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