4 ms·

Is it really just government sanctions? Or do regulatory cost and exposure to liability have something to do with it, too? I think that in the USA at least, g

Is it really just government sanctions? Or do regulatory cost and exposure to liability have something to do with it, too? I think that in the USA at least, government sanctions are far from guaranteed - the courts have confirmed that BTC is a currency. What that means is that there is no longer a question of if you can legally start a Bitcoin exchange in the USA - it's a question of what hoops you have to jump through to do it. (And liability. . . I'm curious if the Flexcoin situation means we'll soon be finding whether a clickthrough EULA that says, "Not responsible for lost or stolen bank accounts" is enforceable.) Now, perhaps the hurdles are prohibitively high. I'm more than willing to believe that's true. But if so, then you're being rather melodramatic to frame this in terms of "government sanctions". That makes it sound like people aren't doing it because they don't want to knowingly engage in illegal activity. It'd be more realistic to just say that competent people are staying out because the regulatory environment results in an excessive cost of doing business for anyone who wants to make sure they're operating on the up-and-up.

abruzzi 13y ago
The hurdles may be high for a couple of guys in a garage, but since the US courts have agreed BTC is a currency, the hurdles are well known and well understood by existing players in the finance world. I suspect their reticence to get into BTC is a combination of limited customer interest, underworld associations (SilkRoad), and volatility. If those three things would go away (i.e. Lots of people want it to use for mundane things, and the price remains relatively stable) I'd bet Bank of America would be happy to get into BTC.
jnbiche 13y ago
>It'd be more realistic to just say that competent people are staying out because the regulatory environment results in an excessive cost of doing business for anyone who wants to make sure they're operating on the up-and-up That's exactly what I meant. Apologies if I made it sound like anything else. It costs millions to start up a money transmission business in all 50 states (like an online exchange would need to), and the federal government has been explicit that they consider a Bitcoin exchange a money transmitter.

abruzzi 13y ago

The hurdles may be high for a couple of guys in a garage, but since the US courts have agreed BTC is a currency, the hurdles are well known and well understood by existing players in the finance world. I suspect their reticence to get into BTC is a combination of limited customer interest, underworld associations (SilkRoad), and volatility. If those three things would go away (i.e. Lots of people want it to use for mundane things, and the price remains relatively stable) I'd bet Bank of America would be happy to get into BTC.

jnbiche 13y ago

>It'd be more realistic to just say that competent people are staying out because the regulatory environment results in an excessive cost of doing business for anyone who wants to make sure they're operating on the up-and-up That's exactly what I meant. Apologies if I made it sound like anything else. It costs millions to start up a money transmission business in all 50 states (like an online exchange would need to), and the federal government has been explicit that they consider a Bitcoin exchange a money transmitter.