The Legalities of Bitcoin

Timely post this one. Some thoughts :

1. Another source that comes to mind is a policy paper authored by Jerry Britto of the Mercatus Center of the George Mason University- Here's the link :
http://mercatus.org/sites/default/files/Brito_BitcoinPrimer.pdf.

Jerry does a great job of cutting through some of the fog and shine light on this important development in Payment systems and currencies.

2. In its Financial Stability Report of June 2013, the RBI has in fact taken note of the rise of the digital currencies; but at present its policy is merely to wait and observe the actions of its counterparts in other jurisdictions. When it does show on the regulatory radar, interesting questions will arise under the Payment Systems Act of 2007 and the regulations for semi-closed loop, open loop money framed thereunder as well as the areas that you flagged off.

In particular, because of the lack of an intermediary and the presence of an open ledger in lieu thereof, the Block Chain- where the miners validate the transactions (and get paid in return), it would be an open issue as to who is the payment system provider under the 2007 law (which requires payment system providers to register with the RBI). The issue is that hitherto, payment systems required a third party intermediary to "keep the books" Bitcoin jolts that conventional payment system mechanism and replaces it with a framework where "the book" is kept on the Block Chain and validated by peer miners. Clearly, the money transfer operations are performed, but not through a payment system provider, as understood by conventional commerce. The RBI will likely notify regs for digital currencies to clarify these and other issues.

3. Because the federal court interpreted the expression, "money" to mean any currency and not necessarily fiat, (as Shaver invited it to hold), the issue as to whether BTCST investment constituted note was rendered moot; nonetheless, BTCST investment would have been found to be a security even under that limb given the nature of enterprise Shaver seemed to have run. Shaver essentially took a demand liability towards the investors ("until you withdraw your funds..") and the paper evidencing that would qualify as a note. Shaver probably took a punt on a narrow interpretation of the expression, money (which only means the legal tender) to bail him out; the Court rightly declining his invitation.

The concept of "Bitcoin', mainly brainchild of technocrat, having been set rolling,seems to be on its course, that too at an increasingly fast pace.
To add, for the exclusive benefit of those , in minority as yet, interested n improving upon their general grasp / knowledge of the new found 'mining'- high-tech – byproduct but remaining unbridled hence unregulated-thus-far:
wld. refer a media column, -Bitcoins: Plenty of enthusiasm, but a long way left to go"- Xcerpt:
"But most of the interest around Bitcoin comes from speculators," he … "The RBI will be watching the discussions around Bitcoin with a lot of …' and as commented, –
<> Not at all surprising that unlike as is commonly witnessed in regard to other sensational topics in recent times of this kind, on this one on 'Bit coins'; so far just a solitary comment has been ventured; that too in the guise of a intriguing poser, waiting for an answer . A couple of possible reasons , as gathered and understood, though simply vaguely, could be that, – as of now it is in wide circulation mostly for peer -to- peer transactions and among high-end speculators. Be that as it may, for simply academic interest, without going into the merits or otherwise of the points sought to be canvassed 'for' , any common enthusiast may look up @ , Response to Andrew Sorkin’s “Render Unto Caesar, but Who Backs the Bitcoin?” in the NYT.
Suggest to, do look up = if you care for,and derive pleasure in sharing, just in doing it.

I really appreciate this post. Well described. Thank you so much…