According to the latest report, the Commonwealth of Nations has asked its 53 member countries to speak out on the legality regarding virtual and digital currencies such as the Bitcoin. The report is purportedly the result of the research carried out over a year on virtual and digital currencies by a working group. Report has also revealed that of all the member nations, only Bangladesh has cited the use of the Bitcoin and other such virtual currencies as illegal.
Working Group Report On Virtual Currencies
The contents of the working group’s report on digital and other virtual currencies cover a wide range of issues from legitimate payments that can be made using Bitcoin and other virtual currencies to the use of technology to combat rising instances of cybercrime. Report also noted that the innovations that could come in along with the use of Bitcoin and virtual currencies have the potential to drive development in many related fields. The Commonwealth of Nations is a group of 53 countries that include countries in Asia, Africa, the Caribbean, Europe, and other nations like Australia, Canada, among others. The report that was published on February 3, 2016, traces the developments related to the Bitcoin and the blockchain system that has been continuously evolving over the last few years. To allay the fears expressed by member countries over Bitcoin and cybercrimes, the report also attempted to reach out for the Dark Web for additional relevant information. However, accessing the “web crawler” for the purpose w as delayed and the report therefore does not have any information in this regard.
Regulatory Recommendations of the Report
As regards increasing instances of cybercrimes involving Bitcoin and other virtual currencies, the report urged member countries to upgrade their technologies to prevent such crimes, to have stringent laws applicable to the existing technology and to be in touch with regulators from different parts of the globe for easier collaboration. The prevention of laundering of money and refraining from financing terrorist activities assumed grave importance in the report and this further necessitated that exchange related and ATM activities has to be under consistent strict observation.
Report also urged the lawmakers to be completely aware of the innovations and the implications in the area of Bitcoin and other digital currencies before making any rules. The report reiterated the fact that criminals would still commit fraud with digital currencies including the Bitcoin when they do not convert funds into the existing government-recognized currencies. The working group report asked the member states to make an effort and publish all rules regarding how digital currencies like the Bitcoin can be used as a medium of exchange and what rules such exchanges have to conform to. Member states were also encouraged to update existing legislations involving all virtual currencies and their trades and taxes that are involved. It is also necessary to frame new consumer protection policies in the light of currencies like the Bitcoin being used in commercial transactions. Notably, the report did not recommend the implementation of any new regulations to alter the use of decentralized or distributed ledges for the Bitcoin transactions/trades that took place. The report highlights the fact that citizens who are not part of the regular banking system can benefit because of the high fund transfer speeds and lower transfer charges. Sandra Sargent, a private banking official, in her contribution to the report has said that there has been a definite shift by private banking institutions towards the use of blockchain technologies. This marks a definite innovation and change in the way financial transactions may be made in the future.
Evidence of Use of the Bitcoin
In an attempt to quantify the extent of Bitcoin use in different nations of the Commonwealth Group, the report observed that about 46 nations had downloaded the Bitcoin Core Wallet. The use of the digital currency showed sharp variations in the different nations. Another obvious finding of the report was that the nations with the highest penetration of Internet usage had the largest number of download of the Bitcoin Core Wallet. The report predicted that prohibiting virtual currencies by the member nations is likely to be ineffective. Moreover, in other nations where regulations have been adopted, they have been observed to be fragmented, limited and with low levels of coordination. However, report concluded that the member nations of the Commonwealth Group make positive moves as regards legalizations of Bitcoin and other virtual currencies as prohibition of these currencies will prove ineffective.