Institutionalized By Its Own Proponents? Virtual Currency Industry Leaders Announce Foundation Of Self-Regulatory Body

Bitcoin, among other digital currencies, has grown dramatically in popularity recently, much to the dissent of various worldwide goverments. Today,
Photo: Andrew Saks McLeod

One of the most attractive facets of using virtual currency as a payment method or a tradable instrument is its anonymity and freedom from the clutches of worldwide governments and central banks.

Regulatory authorities also eschew the crypto-currency world, as by its very nature it is a peer-to-peer network, whereby in the case of Bitcoin, the actual currency is generated by private individuals, for use by private individuals without any issuance or oversight from government authorities.

Just yesterday, Thailand’s financial markets regulator commenced steps to outlaw the currency, yet in Argentina where strict capital control laws, unsustainable inflation added to fear of governmental rulings banning US Dollar usage have plagued the minds of citizens to the point where Bitcoin is experiencing considerable popularity.

Today marks an interesting development in relation to the direction which Bitcoin is taking, as it gains further legitimacy as a genuine alternative to central bank-issued fiat currency, in that a self-regulatory body has been founded by a group of participants in the Bitcoin industry in order to gain a cohesive presence among the ongoing battle with regulators.

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The organization has been designated the Digital Asset Transfer Authority, or DATA for short, and is intended to cover not only Bitcoin but other crypto currencies like Ven and Ven Assets as they become popular financial instruments.

Institutionalization of Virtual Currency?

According to digital currency expert Stan Stalnaker, Global Strategic Head at digital currency firm HubCulture, leaders from the industry are working together for a new regulatory body designed to foster prudent, responsible development of emerging payment technologies.

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Stan Stalnaker,
Global Strategic Head ,
HubCulture

“At the core of the effort is DATA, which is being created to help oversee the rapidly growing virtual currency industry as financial inclusion brings mobile payments to over 2.5 billion of the world’s unbanked” explained Mr Stalnaker.

“The list of leaders attached to the initiative is long, including the Hub Culture network, OpenCoin (managing Ripple), the Bitcoin Foundation and Bitcoin companies including BitInstant, BitPay and Bitstamp, exchanges like Tradehill, Payward’s Kraken and CoinX, eToro, Lightspeed Venture Partners, and others”.

Future Growth Of Operational Framework

“When fully established, DATA will focus with immediate priority on addressing anti-money laundering and KYC issues endemic to the emerging payments space, setting standards and sharing best practices for member companies” concluded Mr. Stalnaker.

The mantra behind DATA is that it is poised to usher development for financial inclusion among the 2.5 billion people coming online in the next four years who do not currently have access to the global financial system through these emerging financial exchange technologies.

Balancing issues around privacy, access to capital, legality, efficient exchange and other aspects of trade enabled by virtual currency could become a part of DATA’s mission.

The Committee for the Establishment of the Digital Asset Transfer Authority will “work proactively with regulators and policymakers to adapt their requirements to our technologies and business models,” said the new group, in a public announcement earlier today.

Although run by free market entrepreneurs and like-minded firms, this could mark a potential step toward digital currency becoming part of its own recognized, free market institutional framework. The cashless society could well be very close indeed.

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