The future of Bitcoins: Legalizing the digital currency

Bitcoin, the primary cryptocurrency or digital currency,

has been publicly traded in China only as a form of investment, but is

not allowed to circulate as a legal currency by Chinese banking

regulators.

China’s commercial banks and other

financial service institutes are also forbidden to provide

Bitcoin-related services or price any products with it.

However, some other countries are moving faster forward in legalizing Bitcoin.

Wealthy

clients of Swiss private bank Falcon can now store and trade bitcoins

via their cash holdings with the bank. The service was approved on

Wednesday, marking the digital currency’s breaking into the asset

management sector.

Falcon said the new offering was

part of its strategic re-positioning. The Zurich-based bank also said

its product has regulatory approval from Swiss financial regulators.

India and Russia, among others, are going in the same direction.

Gaining popularity

The demand for cryptocurrencies is rising in India. The Indian

government has indicated that it may legalize virtual currencies like

Bitcoin and has set up a committee to look into Bitcoins' trading.

Japanese cabinet also approved the "Payment Service

Amendment Act," which took effect in April. Twenty-six stores began

accepting Bitcoin payments after.

Japan is the

world's largest Bitcoin trading market in the world and has issued a

dozen of licenses to exchanges and Internet companies for initial coin

offerings.

Legalization comes with headwinds

The

rise of Bitcoin comes amid headwinds of different views of governments,

mainly because of lack of clear laws and regulations.

The

Financial Crimes Enforcement Network at the US Treasury Department

views it as a virtual currency that is a gift to money launderers.

Additionally,

the Securities and Exchange Commission in the US rejected two different

exchange traded funds that are based on Bitcoin earlier in the year,

claiming that Bitcoin markets are largely unregulated and thus subject

to fraud and manipulation.

However, experts believed

that at the moment, "cryptocurrencies are only popular as a speculative

instrument and a new trend. When it will be possible to pay your taxes

with cryptocurrencies, or the government works out how to do it, then it

will become a full-fledged currency."