A detailed explanation of why official bitcoin is classified as a commodity

A detailed explanation of why official bitcoin is classified as a commodity


A mysterious founder, a group of enthusiastic volunteers, created a hitherto unknown no issue of central institution of network currency, bitcoin, make regulators in a dilemma. The Commodity Futures Trading Commission, the “two evils”, bitcoin into commodities, to avoid the trouble as many money. But bitcoin “danger” is not eliminated, on the one hand, the market on bitcoin derivative products emerge in an endless stream, on the other hand, some European countries are trying to bend, acknowledge its currency status.

“What is bitcoin?” Regulators are really a headache.

The Commodity Futures Trading Commission (CFTC) recently issued a document that, reasonable definition of bitcoin and other virtual currencies for commodities like crude oil or wheat classification. This means that bitcoin futures and options to comply with the CFTC regulations and accept supervision.

The Bank of England said, is studying with the digital currency instead of paper money, as in one of the zero interest rates can implement monetary measures. Last year, the British tax bureau ruled that bitcoin is a currency.

However, a Japanese judge last month to determine bitcoin is not property. In Australia, the bank has just closed a number of bitcoin bank account transactions, also did not provide any explanation.

In the market, bitcoin variety. Bitcoin, bitcoin computer securities have been released. This scan, and back to the question, “what is bitcoin?”

The United States: bitcoin is commodity

The use of bitcoin only isolated as a commodity, is the “two evils” last ditch results

Bitcoin exchange bitcoin founder Grace Grobler believes that both commodity and currency, purpose, and technical purposes, different regulators but from their field and angle to this ruling, not show the nature of bitcoin, “in the United States, many regulators think bitcoin in their own way, and arbitrarily called award or guide. For example, the New York state government that bitcoin is a currency. This is not a wise move. If this ruling does bring influence, related companies will withdraw from the us.”

Focus on bitcoin software developer Mike Hearn that should be recognized bitcoin currency, “CFTC motivation is not sufficient, but creatively re interpretation of the word ‘commodity’. The CFTC’s decision will be challenged in court.”

“Regulators need to bitcoin industry in close cooperation to solve the problem, but CFTC apparently did not do.” Bitcoin exchange Coinfloor CEO Mark Lamb said.

Bitcoin commodities included in the regulation, is the “two evils” results. “Bitcoin is classified as a less controversial commodity rather than monetary or other financial assets is very cautious behavior.” Mark Lamb also admitted that “rather bitcoin was identified as a commodity, because the commodity is regulated at least.”

Limerick senior lecturer in economics at the University of Stephen Kinsella believes that bitcoin is not suitable as a currency, even as a commodity, “is basically equal to the sale of real estate on the moon”. He said, “as a currency, bitcoin is very bad, that the height of deflation. As a commodity, bitcoin is barely passable, but basically equal to the sale of real estate on the moon, the lack of original value. I admire the ability to make money by selling speculators to bitcoin, but I think the bitcoin called a commodity is not enough, it is basically a shadow of assets.”

UK: digital currency may be issued

The Bank of England is on the issue of a digital currency bitcoin technology based on the feasibility

Bred Adam Simy economics and Keynes economics of the old financial empire, Britain, more willing to examine the nature of money from bitcoin.

The Bank of England’s chief economist and monetary policy analysis and statistics executive director Andrew Haldane (AndrewHaldane) in September 18th in the Northern Ireland chamber of Commerce said a Botta, solve the money problem for the Bank of England, is to issue a bitcoin digital currency based on technology, and endorsed by the national.

Haldane cited a series of advantages of bitcoin, more precisely, is a trading system based on block chain: “it is quite clear that distributed bitcoin payment technology has real potential, it solves a profound problem of Monetary Economics: how in a decentralized network, establish trust (the essence of money). Block chain bitcoin, seems to offer an imaginative solution for distributed trust problem.”

However, Haldane also said that whether or not you choose to use a digital currency backed by the Bank of England, the problem is still not solved to a great extent.

“A variant of this technique can support the central bank issued a digital currency, it is still an unsolved problem.” He said, “whether the public will accept it instead of money, is also a problem, a digital currency issued by the central bank will cause a lot of logic and behavioral aspects of the problem. It is actually feasible? What is the security and privacy risks resulting? The public offering and private money, and how to interact?”

According to the reporter, the researchers study at the Bank of england.

China: financial institutions bitcoin ban

All financial institutions and Payment institutions may not bitcoin price for the product or service, may not be sold or traded as a central counterparty bitcoin

Recently, XBTProviderAB announced the release of a new ETN – BitcoinTrackerEUR, this is a euro denominated currency securities Prospectus has been the Swedish financial supervisory authority (Finansinspektionen) approved, will be traded on the Nasdaq stock market on October 5th in northern europe.

This is not feasible in Chinese. In December 5, 2013, the central bank and the Ministry of Chinese, CSRC, CIRC and CBRC jointly issued the “notice” on guard against the risk of bitcoin, clear the nature of bitcoin, that bitcoin is not issued by the monetary authorities do not have the law, such as monetary compensation of the mandatory property, not the true meaning of money. From the nature point of view, bitcoin is a specific virtual goods, does not have legal status and monetary equivalent, can not and should not be used as currency in circulation in the market.

“Notice”, “financial institutions and Payment institutions may not engage in bitcoin related businesses”. At present, all financial institutions and Payment institutions may not bitcoin price for the product or service, may not be sold or traded bitcoins as a central counterparty shall not be covered with bitcoin related insurance business or insurance coverage into bitcoin, shall not directly or indirectly provide other services related to bitcoin for customers.

The future, in addition to the financial use of line three will need to bitcoin regulation, the Ministry also need to regard it as a new technology to monitor, because bitcoin technology products will be launched, the bitcoin computer has been released.

Anderson Horowitzkiki by the Vc firm (AndreessenHorowitz) investment bitcoin start-up company released the first product of 21BitcoinComputer, the computing device is committed to bitcoin as a web service standard and encourage developers to create the integration of virtual currency products.

Chen Shasha (people.com.cn)

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