Taiwan Central Bank Proposes Bitcoin Should Fall Under AML Regulation
The trend among federal governments and the controlling finance bodies in different countries are taking a direct interest in Bitcoin.
Some governments, which had taken a more favorable view earlier towards the cryptocurrency, are also having second thoughts and planning to bring in regulations to ensure the investors, in their respective countries, are not exposed to hardships.
The latest news comes from Taiwan, where the governor of the Central Bank of Taiwan has made a proposal that Bitcoin transactions be brought under the anti-money laundering (AML) regime and regulation.
In Taiwan, the AML laws are implemented by the Department of Justice, and this is the entity the governor has sent his proposal to.
Taiwan Had Welcomed Cryptocurrencies
As mentioned, there were countries which saw a future potential in Bitcoin and other cryptocurrencies, and Taiwan was one of them.
The country’s top financial authorities had permitted initial coin offerings (ICOs) and gave the green signal for working on blockchain technology in the country, which is largely deployed in mining digital currencies.
One advantage Taiwan has is the availability of abundant power with very low costs. There is therefore no difficulty for those mining Bitcoin, which consumes a huge amount of electricity.
Falling Bitcoin Prices the Main Reason for the Change
The immediate provocation for the Central Bank of Taiwan has been the sliding prices of Bitcoin in the exchanges and the imminent risk it poses to the Taiwanese public who would have made heavy investments in the currency, hoping to gain a windfall from these investments.
Now that the price of Bitcoin has fallen below the $10,000 mark from the highs of around $18,000 in a matter of months, the authorities have woken up and wish to protect the interests of the investors.
Electricity Consumption Cannot Be Ignored
In a meeting the governor of the Central Bank of Taiwan had with the country’s lawmakers, he was questioned on the electricity usage by the miners of Bitcoin and how it could affect the country’s overall power consumption.
There have been reports of local councils in many cities across the world reviewing the issue of levying higher tariffs for those engaged in mining Bitcoin or other cryptocurrencies, since they end up consuming a significantly higher amount of energy than is consumed by the rest of the residents in any particular area.
Money Laundering Is an Issue as Well
While the Taiwanese Central Bank is now mulling the idea of bringing the AML regulation into Bitcoin transactions, some countries have already moved ahead and placed curbs on anonymous dealings in banks, insisting on the verification of the account holders’ identity to prevent money laundering.
Malaysia has also passed a new anti-money laundering law that mandates a similar verification process for monetary transactions in real or digital currencies.
This is a period sending conflicting signals on the future of Bitcoin. While one section still has some faith in the currency, the governments in power appear apprehensive and their move to set restrictions and regulations is clearly visible.