All around the world, 2017 was marked by multiple controversies about cryptocurrencies, especially Bitcoin. The truth is that the topic of digital/virtual money is still a big taboo, mainly in conservative economies, such as Brazil and most of the Latin American countries.
Venezuela, Russia, England, Japan, China and many others countries, recently suggested their interest in creating their own state-regulated cryptocurrencies. All the governments of these countries acknowledged the importance of this new era in the global economy, but with serious criticism of Bitcoin, the most popular cryptocurrency in the world.
Now, talking about state-regulated cryptocurrencies is against the free market ideal of Bitcoin; however, it is a positive sign that suggests the world's economy eventually will be very different from the way we know it today.
In 2008, Bitcoin was born with the ideal of giving back to the people the control of their money. It was the search for a free, virtual currency, extremely safe through cryptography, and beyond the control of political and financial elites. Therefore, Bitcoin should be:
- Without borders.
- Anonymous -looking after the owner's safety-.
- Independent -Without the regulation of the Government-.
- Decentralized -without the need for intermediaries (such as banks), since it operates within the P2P system (peer-to-peer).
- Created by its users themselves.
What these governments are looking for is getting involved in this new era, but trying to avoid the volatility that Bitcoin and other cryptocurrencies entail. In Great Britain, the RSCoin would be backed by the Bank of England and linked to the British Pound.
In Venezuela, the PETRO would be born trying to neutralize the economic sanctions from the United States. Its strenght would be backed by the Venezuelan Central Bank, as well as its gold, oil, gas and diamond reserves.
Russia already announced the CryptoRuble, but there is still not much information about how it would work. According to the CoinTelegraph, the mining of the Russian digital currency wouldn't be possible, nor would it be anonymous, trying to prevent any sort of irregularities.
In Brazil, there's been many debates through multiple platforms -social media, regulatory agencies and the Government-. For example, at the beginning of the year, in a hearing held in the House, Rep. Áureo (Solidariedade party / RJ) said before the Special Committee on Virtual Currencies that the Brazilian Federal Reserve is already showing signs of trying to regulate the Brazilian brokers.
Áureo is concerned about the path that this process is taking, since the committee's head is going in the opposite direction to his liberal proposal of regulation, that understands the market itself must adjust. The proposal, which is already in process, was raised by Rep. Expedito Netto, who defends the prohibition of the intermediation, issuance and commercialization of cryptocurrencies in the country.
The banking sector is interested in defining the future of cryptocurrencies. On one hand, their clients have shown interest in this trending topic, but at the same time, they and the Government have a great fear regarding the possibility of losing control over the national financial system.
The president of the Central Bank of Brazil, Ilan Goldfajn, doesn't hide his concern and disbelief when it comes to virtual currencies. He states that this seems to be a financial bubble system with no support, unless it just works as a way to carry out illicit activities or Ponzy schemes.
On Friday, January 12, the Brazilian Securities and Exchange Commission (CVM) prohibited fund managers from investing in Bitcoins and other cryptocurrencies, disqualifying digital currencies as financial assets. The decision was adopted with the argument that these negotiations involve many risks of security and transparency.
However, such measure is just provisional, following the global trend adopted by other market regulators. This is because the CVM considers there is still a lot to find out about this market. (Source: Jornal O Globo).
To understand how controversial this topic is all over the world, two weeks ago the Central Bank of Israel debated about it before ther Parliament, arguing that cryptocurrencies should be considered a financial asset. However, its Vicepresident, Nadine Baudot-Trajtenberg, said that negotiations with these assets involve risks, and that it is a great challenge issuing the guidelines for this system -a problem faced by all Central Banks in the world.
With all this, it's undeniable that 2018 looks quite promising for the crypto-economy. That optimism gave cryptocurrencies a market value of over $700 billion, which certainly continues to draw the world's attention to the evolution of this market, the way we buy and sell products and services, and also how we invest our money.
By Thiago Barbosa