The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has enforced regulations on firms that issue or exchange virtual currencies like Bitcoin. The guidelines are similar to those in place for traditional money order facilities like Western Union, requiring new booking methods and reporting of transactions greater than $10,000.
Bitcoin’s level of popularity, especially among gun runners and drug dealers, is on the rise. Up to this point, there’s been zero regulation on the virtual currency as regulation would essentially admit that it’s legitimate in some shape or form – something the US government isn’t really interested in doing.
FinCEN was clear to point out the differences between real and virtual currency. The former is described as the coin or paper money of the US or any other country designated as legal tender in circulation and is customarily used and accepted in the country of issuance.
Virtual currency, on the other hand, is said to be a medium of exchange that operates like currency in some environments but doesn’t carry the full attributes of real currency. It doesn’t have legal tender status in many jurisdictions and acts as a substitute for real currency or has an equivalent value in real currency.
All of that said, one has to wonder if these new guidelines will have any real impact on Bitcoin as a whole. The nature of Bitcoin makes it untraceable so unless firms are coaxed into cooperation, it’s hard to imagine the regulations being enforced.