Debate briefing: should Bitcoin be a legal currency?
Next week, the Debating London series of free public debates returns with the following motion: This House Would recognise Bitcoin as a legal currency.
Most issues are often more complicated than they first look once they come under scrutiny , but the legal status of Bitcoin (and why it matters) was pretty confusing already. So, here is a short briefing on what it’s all about.
Is Bitcoin legal in the UK?
Ask the question ‘is Bitcoin a legal currency in the UK’ (like I just did) and the answer you will get is: well, yes and no.
Bitcoin is classified as private money, so if you owe a friend £20 and they are happy to accept the equivalent amount in Bitcoin instead, no one will stop the two of you from carrying out this transaction — unless you live in Iceland where Bitcoin is all out banned.
However, the fact that the creation, use, and trade of Bitcoin (and the many other crypto-currencies like it) are not governed by any formal laws — because it’s not considered a legal currency — makes many people and organisations reluctant to accept it as a method of payment — despite its popularity.
What would it mean if it was a ‘legal currency’?
One way to alleviate these concerns is to regulate it to ensure anyone who trades goods and services in Bitcoin is complying with the same rules that govern other conventional currencies. The only way to regulate it the same way you would any other currency is to give it the same legal recognition as any other currency. This is what the government of Japan recently did.
In theory this would mean shops pricing their goods in Bitcoin as well as local currency if they so desired, stocks being traded in Bitcoin as well as Pounds, Euros, and Dollars, and you being able to remit money to someone else through your bank using Bitcoin as your preferred currency — all things that don’t happen right now, but could happen if crypto-currencies were bound by the same set of rules as other conventional currencies.
But…there’s always a but
BUT, one of the main reasons Bitcoin became so popular in the first place is specifically because it is not bound by any rules set by central governments and can therefore be traded freely and anonymously on-line and across borders without having to worry about exchange rates or local laws.
Indeed — also in theory, Bitcoin could eventually just supplant national currencies entirely without the need to comply with any of these rules if enough people used it and governments didn’t intervene by imposing wholesale bans before it could take off.
So what?
So, of the many questions this debate will take on, perhaps the most significant one is whether the rules that govern how people pay for things should be set by national governments or be left solely to the marketplace of sellers and buyers to decide for themselves.
It is actually an old debate that has been going on for centuries and so far it is national governments that have come out on top, but is it possible the answer to this question has changed since we entered the internet age?
You decide.
Join the debate
When: Wednesday 7th February from 7 pm to 9.30 pm
Where: The Tea House Theatre on Vauxhall Walk, London, SE11 5HL
Admission: Free of charge and open to all
How to book: www.debatinglondon.com
How Debating London works
It is a series of free public debates, which are held twice a month and run by the Great Debaters Club, a training programme for adults who missed out on the chance to join a debate club at school or university.
The debates work by getting members of the public to do the debating themselves rather than listen to a panel of experts do it for them, so they can learn how to talk about complex issues that divide public opinion and gain invaluable experience of speaking in public under pressure and scrutiny.
There is one important catch — they don’t get to decide what side of a debate they are on and must defend whatever position they are given. This is to help them appreciate the importance of accurately representing and engaging with other people’s point of view instead of focusing solely on their own.
