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The controversy surrounding the flamboyant adventures and rapid demise of bitcoin promoters Neo & Bee has once again raised the crucial need to regulate or at least understand the virtual currency, one of a handful of crypto-currencies traded, stored and shared worldwide.
Those who had ardently fought against the introduction of the bitcoin in Cyprus will now gloat in their triumph, as if it had been their own doing that Neo’s founder and fund-holder had skipped the country to an unknown destination. But that is hardly anything to be proud of.
The mentality of “if it ain’t broke, don’t fix it” should be left in the past, where the Dark Ages and tired old monoliths determined if there was any progress in Cyprus. Let’s be frank: after the post-war ‘economic miracle’ that helped build the service sector we have today, nothing has really changed, with the exception of minor rates changes, tweaks to the laws and improvements to the whole environment that governs financial services and the international business sector as a whole.
The fact that the founder of just one company has fled the country will not prevent the use of the bitcoin or the eurocoin or any other ‘coin’ becoming more widespread. Those already embracing the virtual curency will be even more determined to use the bitcoin as an alternative to conventional money systems, justifying their actions under the premise that such alternatives could have saved many investors during the banking crisis in the past year that saw billions in real-money and shares vanish into thin air.
On the other hand, no one has ever claimed that there is no risk involved in using the bitcoin as a mode of transaction or investing in mining the virtual currency. Quite the contrary, calls for a clear definition of what is a virtual currency and how it can be better regulated has been on the lips of all in the ‘coin’ community, with the latest breakthrough coming from the U.S. where the tax authorities found an interim solution by suggesting that bitcoin could be seen as an asset, hence is taxable as a capital gain when cashing-in.
Even the recent scandal with the founder of the Mt Gox exchange disappearing, but in this case taking thousands of bitcoins with him, has forced more and more investors to call for better regulation and transparency in the market.
Just by saying “it’s not good” and discarding it, does not mean that Cyprus will be a better place.
It just shows that some people are not ready for change, even competition, while the longer we drag our feet over many such novel instruments, the farther we will be from ever becoming a true financial services centre.
