It is hard to argue against the fact that Bitcoin (BTC), and cryptocurrencies in general, have reached new heights in recent years. As well as hitting record values at the end of last year, Bitcoin has become probably the most-talked-about issue in the financial world and continues to take strides towards entering the mainstream.
Despite this, some criticism and concerns regarding cryptocurrencies remain, with a regular issue being the lack of regulation in the world of digital currency compared to more traditional and established areas of finance. However, the cryptocurrency industry has taken steps towards addressing this issue in recent years and a new development hints that it could be edging closer to finally agreeing its own best practice and regulations.
Achieving best practice
To many people, Cameron and Tyler Winklevoss will forever be known as the twins who took legal action against Mark Zuckerberg regarding the creation of Facebook. However, in more recent times, the entrepreneurs have taken a significant step into the world of cryptocurrency, owning both a significant portfolio of Bitcoin as well as the Bitcoin exchange Gemini Trust.
Furthermore, they are also among the minds behind the Virtual Commodity Association (VCA), a body which recently formed a working group with a view to creating a so-called industry-sponsored, self-regulatory organisation, which will monitor activity in the world of virtual commodities and cryptocurrency.
An inaugural meeting of the body is set to be held in September and is expected to discuss the guidelines for membership to the VCA, alongside regulations for best practice and how the organisation will be staffed. A first step has already been taken on the latter issue too, with Maria Filipakis being named the body’s interim Executive Director. A former Executive Deputy Superintendent at the New York Department of Financial Services, she drafted the department’s rules regarding virtual currencies.
While the Gemini Trust is unsurprisingly involved in the VCA, it is interesting to note that other Bitcoin exchanges including Bitstamp, bitFlyer and Bittrex are also set to take part in the initial discussions.
John Roth, the chief compliance and ethics officer at Bittrex, said the aim was to improve transparency, accountability and security, adding that “the effort” would complement other discussions with regulators about creating “a fully-compliant environment for blockchain”.
An exciting time
The work of the VCA is yet another sign of the cryptocurrency industry’s determination to improve regulation and become a more established force in the financial world. It also comes shortly after Forbes reported that the new exchange Blocktrade.com was seeking to adhere to European regulations known as the MiFID II framework.
All of this certainly appears to hint that for many within the world of cryptocurrency, regulation is the next step on its journey to the mainstream and it is difficult to contest that such a step could make the idea of buying Bitcoin more attractive to a great number of people across the globe. It will be intriguing watching how matters develop across the coming months and years.