Eight years ago, bitcoin was an experimental technology of interest only to a handful of enthusiasts.Today, China – which contains one in every five internet users – is mulling the idea of a national cryptocurrency.The People’s Bank of China (PBOC) has been trialling a national digital currency based on the same underlying technology as Bitcoin.Here’s a description of how the blockchain works, but in summary – it’s decentralized, transparent and secure.Governments worldwide have had a problematic relationship with Bitcoin.The US has held federal hearings on it, while at a state level New York has heavily regulated the cryptocurrency with its Bitlicense.Ecuador, Bolivia and Russia have all moved to ban Bitcoin outright, while other countries have taken their time working out what to do with the cryptocurrency.China has been among the more aggressively anti-Bitcoin regimes.Over the past few years, PBOC has pressured exchanges and banks over Bitcoin, and the government turned up the heat again this year.

It’s not surprising that countries have found it difficult to tackle cryptocurrencies.People exchanging things on peer to peer (P2P) networks used to be the music and video industry’s problem.Now, suddenly, people were exchanging money with them.When used properly, P2P money offers true anonymity, which creates problems for authorities trying to track the flow of cash to terrorists and organized criminals.Left unchecked, it’s also a great tax evasion tool.Where governments are regulating, they’re typically making sure that anyone trading bitcoins registers their identities so that authorities can follow the money.It’s a tricky line for policymakers to walk.Governments need to control cryptocurrencies, but if they squash them altogether, they risk missing some of its best innovations.These include fast payments, micropayments, integration with the Internet of Things, and the ability to secure transactions using permission from multiple parties.Governments could digitize payments using a centrally controlled digital currency, sans blockchain, but then people might not trust it.

Many people would find the idea of government-tracked money unpalatable.Could a cryptocurrency-based national currency satisfy everyone, providing convenience and privacy, while giving governments enough visibility to avoid fraud and criminal financing?bitcoin casino ioThat’s what China seems to be hoping for.bitcoin is gold bitcoin is silver what is bronzePBOC said as far back as January 2016 that it was exploring a digital national currency, arguing that it would reduce the cost of distributing money, also also help curb financial fraud.bitcoin volume meaningIt released several working papers, and trialled a blockchain-based trading platform that also supported currency issuance.earn bitcoin ptc

Fan Yifei, PBOC’s vice-governor, has emphasised the differences between privately issued currencies (like Bitcoin) and other cryptocurrencies issued by central banks.The former is volatile, with limited acceptance, he has said, while sovereign credit backs the latter.bitcoin alarm app iphonePBOC deputy director Yao Ago last autumn described a digital currency that could be issued by China’s central bank, but through commercial banks that distribute it to the public.bitcoin rhode islandPBOC seems to recognize the need for anonymity, and wants to preserve that through the use of cryptography, but also wants to analyze data at a macroscopic level to understand where it’s going.bitcoin dice game listIn short, he seems to be saying “you can trust us”.bitcoin faucet every 1 minute

Bitcoin’s original ethos, though, was that you didn’t have to trust anyone.Still, tighter currency controls will be more attractive to many countries wanting to understand where the money goes – and nowhere more than China, which faces a hefty shadow banking problem.ethereum price october 2016China isn’t the only country to consider a digital version of a national currency.Singapore has been testing one.In the UK, a Bank of England economist at least toyed with the idea.In Canada, which for a while mulled its own digital payment system before selling it, the central bank has suggested that a digital currency would need its guiding hand to be truly successful.“National” cryptocurrencies can come from other sources.In Iceland, where the economy suffered more than most during the financial crisis, anonymous cryptocurrency advocates released a cryptocurrency for the nation, called Auroracoin.The blockchain isn’t a necessity for countries considering digitised national currencies, but if used, it does offer at least a shot at privacy.

Detail is everything, though, and specialists focused on cryptocurrency and security will be taking a close look.You can head back to our homepage, or check out some great posts.Bitcoin is no longer reserved for geeks and gains more publicity every day, together with control from the state.Here are 5 countries with the tightest bitcoin regulations, which does not always mean a ban.Iceland became one of the few states to legally forbid trading operations with bitcoin.As its central bank states, “it is prohibited to engage in foreign exchange trading with the electronic currency bitcoin, according to the Icelandic Foreign Exchange Act.” However, it did not prevent the birth of the local cryptocurrency – auroracoin, whose creator bears the pseudonym Baldur Friggjar Óðinsson derived from Scandinavian mythology.Besides, Iceland remains a significant bitcoin mining centre.The USA are considered a bitcoin-friendly country, but its government seeks to control bitcoin operations the same way it does with traditional currencies.

In March 2013, the Internal Revenue Service considered virtual currency as property liable to federal taxation and ruled that professional miners are subject to the self-employment tax.In September 2015, the US Commodity Futures Trading Commission (CFTC) defined bitcoin as a commodity subject to the existing legislative regulations.Thus, CFTC clarified its position regarding bitcoin and, in addition, accused bitcoin operator Coinflip of illegal trade and swap operations.This step was regarded by a part of the community as an act of bitcoin legalisation and incorporation of the cryptocurrency into the existing legal framework.Licensing matters remain at the discretion of each state.On 24 June 2015, the New York State Register officially published the final “Regulation of the Conduct of Virtual Currency Businesses.” This provided that all bitcoin companies need to apply for a licence in order to prove compliance with the conditions announced by the New York Department of Financial Services.

According to the so-called BitLicense, bitcoin companies are obliged to follow strict KYC (Know your customer) and AML (Anti-money laundering) rules.The deadline for submission of applications was 8 August.Any company that failed to apply by this date or whose application was rejected would not be allowed to operate in the state of New York any longer.The bitcoin community interpreted the document as an intrusion into the emerging free cryptocurrency market.Several companies left New York State immediately after the publication of the regulations, including ShapeShift, Kraken, Bitfinex, LocalBitcoins and BitQuick.Since March 2016, virtual currencies are recognised in Japan as “asset-like values that can be used in making payments.” A set of rules has been also adopted to fight money laundering and protect customers of digital currency exchanges.The new regulations also place bitcoin exchanges under the authority of the Japanese Financial Services Agency (FSA).They are obliged to register with the Agency, have a minimum capital of ¥10 million, submit annual financial reports and undergo auditing by certified accountants.

This is expected to help prevent money laundering and drive out of business smaller enterprises incapable of protecting customer funds.According to attorney Motokazu Endo, “Cryptocurrencies' prices fluctuate sharply, and they're highly speculative.Many exchanges have weak financial bases, and should they go bankrupt, it would be tough to protect creditors' assets.” Currently, people in Japan who buy bitcoin have to pay an 8% consumption tax.It is levied every time a Japanese citizen purchases bitcoins with yens through a Japanese exchange because this bitcoins fall under the definition of “imported goods”.However, bitcoins can be bought on foreign exchanges and “smuggled” into the country avoiding taxation.The current rules of the Australian Taxation Office attribute to bitcoin the status of “intangible assets” rather than money making it subject to goods-and-services tax (GST).Bitcoin businesses also can be liable for the tax if they receive payments in bitcoin.

Meanwhile, in March 2016, it was announced that the authorities will seek to introduce legislation on digital currencies and address the problem of its double taxation by exempting bitcoin from GST.The legal base for this is to be developed by the end of the year.Since 2014, Australian bitcoin businesses are obliged to submit detailed customer reporting and inform the law-enforcement authorities about suspicious deals.Last August, the Senate Economics References Committee’s inquiry into digital currency recommended bitcoin along with other cryptocurrencies to be recognised as regular money.In October 2015, Australian governmental report assured that the emerging payment systems, such as bitcoin, will be regulated “in a graduated way”.Despite official declarations, Australian banks adopted rather a hostile attitude towards the bitcoin industry.In September, a group of leading banks, including Westpac Banking Corporation and CBA, made an unexpected announcement to the founders of at least 17 bitcoin startups, saying their accounts would be closed, without any further explanation.

This attack on bitcoin companies made the Australian Competition and Consumer Commission open an investigation whether the closing of the accounts complied with the law.Early in August 2016, government agency Australian Transaction Reports and Analysis Centre published a report stating that “electronic, online and new payment methods” are increasingly used by terrorist groups.The document suggests a further tightening of cryptocurrency regulations in the country.The official attitude towards bitcoin in China is ambiguous.Its legal status is far from being equal with that of fiat currency: financial companies are directly forbidden to own it.The cryptocurrency is not recognised as a means of payment by the official structures: banks do not accept it and Chinese financial system does not protect bitcoin owners in the case of stock exchange crisis.Bitcoin, however, is not forbidden for private use.Citizens may sell and buy bitcoins between each other as well as make deals with foreigners.