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​‘We don’t do bitcoin’: Denmark’s finance regulator exempts crypto-currencies from its function

Published time: December 17, 2013 20:43
AFP Photo / George Frey

AFP Photo / George Frey

The Financial Supervisory Authority of Denmark has issued a statement warning against the use of bitcoin, litecoin and the like as “unsafe”, but also saying they will not be regulating crypto-currencies exchanges should they appear.

In total, Tuesday’s statement echoed the European Banking Authority warning that crypto-currencies exchanges are not a safe place with users risking their money as the latter might get stolen or become inconvertible into real money at any point.

However, the formidable preamble was followed by a sudden declaration: As crypto-currency is not money at all, then the FSA has no job in regulating crypto-currencies exchanges.

“Companies do not need permission to be able to establish their operation in Denmark if they want to run bitcoin Exchanges that also include exchanging real money,” the Authority says.

The decentralized, crypto-currency bitcoin, one of about hundred virtual currencies in the world, was introduced in January, 2009 and cost then $0.05 per unit. It has so far been free from any government or central bank control. Currency is sold and bought at online exchanges, and those transactions can be virtually anonymous.

Now bitcoin’s tipping on the controversy edge. In late November it’s value hit over $1,000 per bitcoin while many institutions as police or universities eye to use the e-currency for payments.

However, a number of high profile scams involving bitcoins has also been registered. Last month a Danish bitcoin payment processor with a free online wallet service lost over $1 million worth of bitcoins after a security attack on its server. While in China a bitcoin platform swindle scooped up $4.1 million in bitcoins before disappearing.

This made global players wary of the crypto-currency. The European Banking Authority issued a statement on bitcoin last Friday saying there is “no guarantee that currency values remain stable,” and that it intends to investigate bitcoin further “in order to identify whether virtual currencies can and should be regulated and supervised.”

Despite the concerns, the bitcoin remains in the limelight, with exchange ATMs popping up across Canada and Europe. In Sweden, Safello has launched a machine, which allows users to change bitcoins for actual cash.

Comments (12)

 

Front Sobirà 18.12.2013 13:37

As long as you need an exchange you are recognizing the existence of the other currencies national bank-controlled. I think the common currencies behaves according to central banks in order to regulate the economy, or economic sectors in each country. The fact of bitcoin is also regulated by the offer and demand, and capable of holding speculative movements. Most of people who talked to me about bitcoin talked as make an investment. Nowadays is a new tool regulated by offer and demand and its origins are not so clear and sometimes related to the mafia and the push of the Silk Road market. Not much more.

 

scott boulier 18.12.2013 09:53

as long as you have an internet or a power grid whicj the estalishment can halt at whim

 

Damjan Hajsek 18.12.2013 08:34

Bitcoin will survive any of that fiat currencies, because it is out fo hands of currupt banks and their slavery system. Banks can decide when some fiat currency will raise and when it will fall and when they will make a new world fiat currency. Bitcoin is peoples currency and market define it value. Just watch how long banks will look at that digital currency until first bank will buy one of it. People which think Bitcoin will die, still live in 19. sentury.

View all comments (12)
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