Bitcoin is a virtual universal currency accessible free of charge. This means of payment was developed in 2009 both in Asia and in the US, and can now be used on websites all around the world. This independent monetary system doesn’t need banks to process transactions or central banks to create new bitcoins; those tasks are supported by a community of users whose computers work in peer-to-peer networks.
In France, Bitcoin is effective and tolerated by the authorities; it is legal under French law, considered a form of barter. The French Minister of Finance, Michel Sapin, stated that “virtual currencies attest to a capacity of innovation to be promoted. […] Therefore, the Bitcoin system must be regulated by the French State.” However, Mr. Sapin also listed some of the drawbacks of the currency: the currency’s issuers and users are protected by anonymity, and Bitcoin is therefore often used for illegal purposes, such as trafficking, fraud, money laundering or even financing terrorist cells.
These illegal purposes extend beyond common users to powerful executives: M. Mark Karpelès, the French ex-head of Bitcoin was indicted last Friday in Japan, facing charges of data falsification and embezzlement. He is accused of having stolen 2.3 million euros (2.6 million dollars) from Bitcoin deposits.
To limit the negative aspects of bitcoin, the French Minister intends to “lift the anonymity of Bitcoin users where the virtual sphere meets the real world, when one uses virtual currencies to make a purchase.” Mr. Sapin also aims to tax the profits made by individuals on the Bitcoin market.
by Marin E.
Bitcoin is a virtual currency used mainly on the internet that has emerged over the past five years, advanced by the growing influence of e-commerce. At first glance, Bitcoin perfectly fulfills all three essential functions of a currency: it facilitates exchanges (it can be used to buy goods and services), it serves as a unit of account (it can define the value of specific goods and services), and it can be stocked as savings or for future use.
Nevertheless, these features are not sufficient for Bitcoin to qualify as a global currency, because its use poses serious risks for consumers. Traditional currencies such as the dollar and the euro benefit from the control of centralized systems (called central banks) that regulate their value if it becomes too low or too high. The value of the Bitcoin, on the other hand, is governed only by supply and demand, which makes it a highly unstable currency: the value of one Bitcoin was 80 euros in June 2013, then rose to 800 euros by November of the same year. Besides this, traditional currencies come with laws ensuring reimbursement in the case of fraud, and no such laws exist for Bitcoin.
In France, Bitcoin is seen as a promising currency for investments but one that still needs to be regulated, in order to prevent its use from becoming out of control or serving illegal purposes (such as the drug trade or networks of prostitution). At present the French public does not yet consider Bitcoin a serious official currency but rather a bartering tool. The French government is, however, coming up with potential systems of regulation, such as establishing a limit for the value of transactions, in order to ensure that this innovation is used properly and with positive intent.
by Emma P.