Irish Central Banker addresses Bitcoin conference in Dublin, examines real-world economy with Bitcoin

Gareth Murphy, the Director for Markets Supervision for the Central Bank of Ireland, addressed the Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term Finance 2014 Conference and Expo in Dublin.

Unlike most statements from financial authorities on these matters, his touched upon all facets of the issue. Economic statistics, for example, is rarely talked about but is central to any discussion on how a digital currency will benefit society as whole. Also unlike many central banking figures, his outlook on virtual currency was at least neutral, if not slightly upbeat in tone.

His speech was also a rare instance of a central banking figure addressing a digital currency conference.

Interestingly, he touched upon the notion of a multi-currency economy when conducting the following thought experiment: virtual currency evolves to the point where it is used on a comparable basis to traditional money. Economic activity has to be measured as an aggregate of the two. Such a notion was an interesting topic of discussion, and debate, in one of our recent analyses. Such a scenario brings 7 issues which he believes financial authorities will have to be concerned about:

(1) Economic statistics

(2) Monetary and exchange rate policy

(3) Tax leakage

(4) Payment systems and settlement infrastructure

(5) Consumer protection

(6) Anti-money laundering

(7) Impact on regulated financial service providers

On tax leakage, he reminded everyone of the sobering risk posed by an anonymous currency:

"There is a substantial threat to the country's finances if more and more transactions for goods and services in the national economy disappear from the tax net."

One can add that if configured accordingly, a digital currency can vastly reduce the extent of tax evasion. The indelible nature of its central ledger grants full transparency to all transactions ever recorded. There is no room for cash transactions. And if such a currency is centralized and every individual's tax situation can be "digitally derived", there is potential for streamlining activities such as the automatic withholding of income and sales tax.

On consumer protection, the currency is supposed to function as a stable store of value, something which today's volatile trading does not exemplify. In economic terms:

"When consumers lose confidence in currencies, the related uncertainty leads to a drop in economic activity. This may also lead to a potential waste of resources as consumers attempt to protect the value of their purchasing power by acquiring assets that have a stable consumption value."

He concluded by cautioning the public to avoid the "cat and mouse" reactionary approach taken during the 2008 financial crisis (during which Ireland was hit particularly hard). Rather, authorities should be proactive in planning for the Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term of virtual currencies so that their arrival will not adversely shock the financial system.