In Forex Magnates’ weekly wrap up of the Bitcoin industry, courtesy of specialist news site, DCMagnates, it’s another episode of mayhem in the world of crypto-currencies.
The sector saw mixed discussions, on the one hand, France shutdown an unregulated Bitcoin exchange and the thought of ISIS militants using Bitcoins to fund further operations and exemplify their war, raised considerable concerns.
However, on the bright side, we saw a venture capital firm launch a new Bitcoin index. Jersey is regulating its first regulated Bitcoin investment fund and a central bank from the small island of New Zealand, and has spoken in support of Bitcoins and their future.
Why Monitoring of Digital Currencies Is Key? Terrorist Funding
The news that militants of the condemned ISIS group are using Bitcoins to fund their ‘holy war’ comes as no surprise. Governments from across the developed world have been battling with factions who use the circulation of funds for illicit activity. Among the many crimes associated with money laundering, terrorist funding is one of them, and the thought that militants could have access to unverified ‘cash,’ highlights the dangers of unregulated currencies. The Terrorism Act and Proceeds of Crime Act were both introduced to combat such instances, however with no method to audit virtual currencies, the concerns are genuine.
Regulators and government agencies have been combating illegal Bitcoin venues, reports from French media stated that the police arrested individuals who were running an unauthorized online Bitcoin exchange. The report mentioned that a total of 388 bitcoins, worth 200,000 euros were confiscated by authorities.
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Leaving it to late Friday afternoon, France’s Ministry of Finance has issued guidance on virtual currencies, the authority raised a number of points on the future regulation of the currency and the taxation of their purchase and sale. A step in the right direction for the wider EU region as Bitcoins continue to gain traction.
More ‘Funding’ for Digital Currencies
With investors thinking twice about crypto-currency related projects, trust the venture capitalists to produce, and this certainly was the case for Bitcoin wallet provider Xapo, who managed to raise a formidable $40 million in Series A funding. The figure beats the previous record by BitPay in May, who managed to raise $30 million. In its latest episode of capital sourcing, Xapo raised $20 million, the funding was led by venture capital firms Index Ventures and Greylock Partners.
Xapo’s news was shadowed by Pantera Capital’s (a VC firm) new research paper on the impact of the venture capital sector on the future growth of Bitcoins, coupled with the firm’s new index that aims to measure mid-term price movements in the digital currency. The index is named Bitindex, which measures a number of contributing factors that affect the price of the currency, including developer interest on GitHub, merchant adoption, Wikipedia views, Hashrate, Google searches, user adoption as measured by wallets and transaction volume.
The number of pros and cons of Bitcoins is a common discussion point, however, if they can serve the needs of the people then undoubtedly they have a future. That seems to be the case for overseas workers from the Philippines who use Rebit.ph, the specialist Bitcoin remittance service provider, which reported that it lowered its transfer commissions, thus making it nearly 60 times cheaper than Western Union to send funds aborad. According to the World Bank, the Philippines is one of the largest receivers of remittances, estimated at $25 billion, per annum.
And last but not least, the world’s most business-friendly, least corrupt nation, New Zealand, made positive steps in the understanding of virtual currencies. The Reserve Bank of New Zealand’s (RBNZ) Deputy Governor and Operations Head, Geoff Bascand pictured, raised crucial points of discussion during a speech. He emphasized the role virtual currencies can play in the future and the potential they have to replace physical cash. Furthermore, he suggested that regulators and central banks take heed of virtual currencies and regulate them accordingly.
The messy world of virtual currencies is battling for survival like a fragile foetus, however, with interest from central bankers and reactions from governments, the prospect of a ‘more’ understood product isn’t far away.