As the paper dollar becomes more and more inconvenient for the new generation, the financial industry has had an influx of change thanks to the introduction of cryptocurrency such as Bitcoin. While this is only one of several types, it is the digital currency a growing number of people are becoming familiar with.
While there has always been a solid standard applied to the world’s traditional currencies, Bitcoins are still relatively new. Efforts are underway to establish a standard that every type of cryptocurrency must adhere to.
A task force has been created in order to accomplish this goal. The global anti-money laundering is leading the task force in creating and eventually imposing these standards. Seen as a matter of urgency, regulation of Bitcoin and its peers is now a top priority.
Once new regulations have been agreed upon, the standards for virtual assets will be updated. Until that update happens however, the rules regarding this new type of currency are unsure at best. For as long as this continues, financial systems throughout the United States and the rest of the world are at risk.
Though central banks are not currently permitted to regulate any digital currency, they are able to anonymously hold the electronic identities of their customers. However, this had led to these currencies being used to make illegal purchases.
The United States has responded to this problem by tasking financial crime units with monitoring digital currency accounts to ensure they are being used only in ways that are compliant with the laws. This only applies to those accounts that aren’t equipped to block users from laundering money.
In the United Kingdom, the response to this problem has been to expand on a rule set forth by the European Union. Due to an expansion of the rule, those trading digital currencies must make their identity known. Regulations are also being put in place in Switzerland, Malta, France and other countries.
The current goal for all regulation of digital currency is to strike a balance between preventing illegal use of the currency and allowing it to be used in legal ways.