UK Banking Safeguards: Can They Protect Bitcoin Consumers?
Storing personal wealth in bitcoin, or any other cryptocurrency, is clearly revolutionary. So much so, it's going to take a long time for mainstream consumers to actually understand the concepts and potential behind these currencies. One of the areas people should rightly be concerned with is the safeguards that are in place when making purchases with digital currency. The UK's established financial institutions already provide certain guarantees and safeguards against fraud and retail disputes. None of these are currently offered by bitcoin services. Here are some of the services that....
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David Gilson over at CoinDesk tries to offer a balanced perspective on traditional banking and the safeguards they implement for security. These he contrasts with the safeguards Bitcoin lacks and suggests that some improvements could be made to the digital currency. First, he suggests that the UK’s financial institutions’ safeguards against fraud and retail disputes offer a level of security that Bitcoin does not. Next, he discusses savings accounts and how government guarantees protect against losses of up to 85,000 GBP per customer, per institution. So, if a bank goes bankrupt, the....
California state officials are considering the creation of a set of regulations that would seek to inform consumers of the risks associated with using virtual currencies while simultaneously creating safeguards against said risks. The Department of Business Oversight claims that the state's money transmitter laws, which are currently used to regulate business such as Western Union, are applicable to Bitcoin. Speaking with Bloomberg, California Department of Business Oversight spokesperson Tom Dresslar said: The consensus among staff is that the department and commissioner could regulate....
The recent bitcoin exchange hack underscores the vulnerability of bitcoin exchanges, an issue that needs to be addressed if bitcoin is to gain a larger following, according to Megan McArdle, a Bloomberg columnist. (McArdle most likely referred to Bitfinex.) Safeguards have been considered, such as a virtual “exploding dye pack”, but it remains to be seen if such safeguards will be accepted. It took banks many years to develop safeguards that ultimately made bank robbery undesirable to criminals. Bitcoin Theft Is Profitable. McArdle noted that bitcoins are comparatively profitable for....
The European Banking Authority (EBA) has issued a warning on potential risks related to virtual currencies, but the warning is largely focused on the possibility of fraud and theft. The authority points out that consumers are not protected by union regulation when they buy, trade or hold virtual currencies such as bitcoin. In addition, the regulator warns that there is no guarantee that currency values will remain stable. The EBA was apparently prompted to issue the warning due to a sudden increase in virtual currency trading and the fact that virtual currencies are constantly in the....
Bitcoin could be an interesting option to tackle full-reserve banking in the financial industry. The way this could work is by using Bitcoin as a hedge against banks, and assets could be accounted for on the blockchain. Transparency in full-reserve banking is of the essence, yet it is also one trait most banks are lacking right now. Bitcoin is often referred to as being many things, ranging from a commodity to currency, and even a solution to solving all of the financial trouble in unbanked and underbanked regions. But very few people believe Bitcoin has the potential to change reserve....