Around the world, bitcoin has been rapidly growing in popularity, particularly among users who are looking for an alternative to traditional currencies.
MSN News reports that Romania recently welcomed its first bitcoin ATM. Until the ATM opened in May, users who wished to buy or sell bitcoin in Romania were forced to rely on wire transfers or face-to-face currency transactions.
Interest in bitcoin has been steadily growing in Romania, located in a region where national currencies are largely viewed in a negative light when compared to the euro. While it has been 25 years since the fall of communism in Romania, many citizens remain somewhat distrustful of anything government regulated. With a tendency toward tech-savviness, Romanians have become increasingly fond of cryptocurrencies.
The first bitcoin exchange opened in the town of Oradea, nearly 400 miles from the capital. Since it opened, the exchange has attracted more than 2,000 completed transactions totaling more than $1.57 million, according to MSN News. 1
As the second-poorest state in the European Union, Romania faces a number of economic challenges, including weak tax-collecting practices and the inability to fight fraud. Critics of the cryptocurrency have expressed concern that the country is ill equipped to properly handle bitcoin.
While individual users, as well as startups, have been quick to adopt bitcoin in the United States, bitcoin remains relatively new to Europe. To date, activity involving bitcoin has been large restricted to such economic centers as London, Berlin, and Amsterdam. In Romania, entrepreneurs are quickly making plans to transform the face of their country with the cryptocurrency. In order for the cryptocurrency to gain credibility, the country will need a legal framework. Prior to opening the Bitcoin exchange, it was necessary for operators to search existing legislation and attempt to interpret the policies that do exist.
Although only one bitcoin has been opened in Romania, plans are already underway for more to be opened around the country. For its part, the government of Romania is not thrilled with the idea of a bitcoin network expanding throughout the country. The Romanian Financial Supervision Authority has issued a statement reminding citizens that the use of bitcoin is not regulated and such use comes with large risks. Additionally, the ASF has stated that prior to the issue of regulation even being considered, it would be necessary for bitcoin to demonstrate a strong economic importance in Romania first.
To date, the Romanian government has elected to enforce only EU rules in relation to various cryptocurrencies, including bitcoin. Among the main problems facing the widespread acceptance of bitcoin in Romania is the fact that the European Banking Authority has advised policy makers that cryptocurrency use should be discouraged until a regulatory framework is in place.
In July, the banking watchdog of the EU, the European Banking Authority, encouraged policymakers to discourage payment and credit institutions from buying, selling, or holding cryptocurrencies. The EU has said that regulation would be left up to individual member nations. Sweden has already made requests for the European Union to provide clarification regarding its stance on bitcoin taxation.
Recently, it was further reported that the European Commission, which is the executive body of the European Union, has plans to pursue restrictive legislation regarding bitcoin usage. More than 70 risks were identified by the EBA as involved in the use of bitcoin. The primary concern related to bitcoin use relates to the anonymity provided by the cryptocurrency. Such anonymity is one of the features that often attract so many users to virtual currencies, an element that also makes it difficult for governments to trace users.
Since the fall of Mt. Gox, once the largest bitcoin exchange in the world, governments have become increasingly aware of cryptocurrencies such as bitcoin. As the awareness of bitcoin increases, concern regarding the passage of regulation increases, as well. More and more governments have recently begun to focus on bitcoin and determine how to handle the cryptocurrency in terms of regulation. At the heart of many of the latest policies related to cryptocurrencies has been regulations regarding terrorist financing and money laundering.
The European Union is not alone in considering regulations regarding bitcoin. China has already restricted banks from the use of bitcoins as a form of currency, citing concerns regarding threats to the country's financial stability and money laundering. Germany has also stated that the country would not recognize the cryptocurrency as a foreign currency. Furthermore, any gains associated with buying and selling bitcoins would be considered taxable. A similar approach has been considered in Norway. Although bitcoin has been widely embraced in the United States, legislators have expressed concern about regarding the cryptocurrency. In New York, regulators have begun to consider a BitLicense for businesses that accept cryptocurrencies for transactions.
Despite concerns regarding regulation, Romanians seem keen on making use of Bitcoins, particularly now that the first of a planned network of ATMs is already underway in the country.
1) Reuters. Bitcoin catches on in tech-savvy Romania.