GoldMoney discusses Bitcoin with Jon Matonis

I very much sympathize with the old school goldbug scepticism about Bitcoin. It’s very reassuring to feel the weight of your money in your hand, and I don’t believe that Bitcoin meets with Mises regression theorem. But even if you don’t see Bitcoin as a sound form of money, you have got to admit that it’s damned useful! Bitcoin is perhaps the best alternative available at the moment for those suffering under the fiat banking system. As such it’s great to see an increasing number of traditional goldbug institutions, such as GoldMoney, embrace Bitcoin.

In a new podcast GoldMoney’s Andy Duncan discusses Bitcoin with the Bitcoin Foundation’s Jon Matonis. They discuss Bitcoin’s volatility, it’s dependence on the internet, 1 yr and 10 yr predictions for the currency and the ongoing Bitcoin vs Gold debate.

Listen to the podcast here. Cyprus and the Unraveling of Fractional-Reserve Banking

The Cyprus “bail-in” model of bank rescue, which seems to be gaining popularity, is simply frightening.  Fractional reserve banking is built upon depositors trust in their banks, “for fractional-reserve banking can only exist for as long as the depositors have complete confidence”. Financial regulators are destroying their own system by making depositors fear for the safety of their money… they’re either that stupid or that desperate.  Frightening.

Joseph T. Salerno sees the silver lining here arguing that Cyprus may bring about the unravelling of the current banking system and expose “the true nature of fractional-reserve banking for all to see.”

Continue reading “ Cyprus and the Unraveling of Fractional-Reserve Banking”

Bits and Pieces 29thMar13

  • The BRICS nations, 43 percent of the world’s population, are working on a new “development bank” set to bypass the World Bank and the IMF.

“There’s a shift in power from the traditional to the emerging world.”

The move is seen as a way for BRICS to protect themselves from the US and Europe’s financial trouble and as a way to increase their global financial influence.

Details here  and here.

  • Russia to ban cash transactions over $10,000
  • Bitcoin’s market capitalization briefly hits $1Billion!
  • Texas want’s its gold back from the Fed.


Will FinCEN attempt to regulate virtual currency exchanges outside the US?

We’ll just have to wait and see, but it looks like they might try. In a ‘guidance’ issued in February last year FinCEN believes that a business may qualify as a Money Services Business “based on its activities within the United States, even if none of its agents, agencies, branches or offices are physically located in the United States.”

Continue reading “Will FinCEN attempt to regulate virtual currency exchanges outside the US?”

DollarVigilante: World's First Bitcoin ATM Heading to Cyprus

bitcoinatm-crop“While European politicos negotiate in Brussels, deciding the fate of other people’s money in Cyprus, the free market has already moved in to help Cypriots get access to their money via other means.

The Dollar Vigilante‘s editor-in-chief and Bitcoin ATM CEO, Jeff Berwick, is planning the first Bitcoin ATM. “If we did this now, and we are moving quickly to make this so, we would be the only functioning ATM on the island.”

The planned ATM will allow users to deposit fiat and receive Bitcoin as well as send Bitcoin and receive fiat in return.

Continue reading “DollarVigilante: World's First Bitcoin ATM Heading to Cyprus”

Bitcoin & The Banking System: Not Just Different, But Entirely Incompatible

Commercial banking is a money making endeavour; literally.  Sure there’s a complex set of rules, but the short story is commercial banks create money. A button is pressed and congratulations, your loan has been approved and $50k of brand new digital Dollars are now sitting in your bank account.

As you might imagine, creating new money is a very handy little trick for banks. In fact, the commercial banking business model is dependent on the variable nature of national fiat currencies which makes this possible.  But this trick only works on fiat currencies, replace the US Dollar with Bitcoins, and the banking system as we know it today ceases to exist.

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What FinCEN’s guidance could mean for Bitcoin

As you would expect the Bitcoin world is abuzz with commentary and speculation about the consequences of the FinCEN paper. Some of the more interesting theories on its implications are below…

FinCEN’s guidance may lead to Bitcoin businesses being required to obtain separate money transmitter licenses in 48 states; a difficult and very expensive task. Payment Source.

Could FinCEN’s target be Bitcoin’s anonymity? Might they target Bitcoin mixing services? The Ümlaut.

The guidance may imply that every person who has ever had any virtual currency and exchanged it for ‘real’ currency can now be considered a money transmitter.  The Bitcoin Foundation.

FinCEN Issues “Guidance on Virtual Currencies”

fincen.header-editThis guidance was issued to “provide clarity and regulatory certainty for businesses and individuals engaged in an expanding field of financial activity.” Or put another way, FinCEN explains who exactly they intend to regulate.

FinCEN covers their bases here discussing “users, administrators, and exchangers… persons creating, obtaining, distributing, exchanging, accepting or transmitting” virtual currencies, both centralized and de-centralized, e-currencies and e-precious metals.

  • FinCEN sees those dealing in virtual currencies as their regulatory responsibility
  • Users, and Bitcoin miners seem to be exempt from regulation for the moment
  • Buying or selling virtual currencies for “any reason” can make you a money transmitter and subject to FinCEN regulation
  • Virtual currency dealers are NOT necessarily foreign exchange dealers
  • FinCEN rules can also apply to those dealing in e-precious metals
  • However, Prepaid Access rules do NOT apply to virtual currencies

Summary below.

Continue reading “FinCEN Issues “Guidance on Virtual Currencies””

Bank robbery in Cyprus; depositors set to have up to 10% of funds seized

stickup-cyprus-blLike most of Europe, Cyprus and it’s banks are in trouble.

In a bailout deal with the Eurozone Cyprus’s bank account holders are being forced to pay the bill…not troubled bank bond holders, depositors. “The illusion that depositors don’t need to yank their money out of threatened banks because they’ll be protected has been shattered.”

Come Tuesday morning Cyprus’s bank account holders could see their balance shrink as much as 10%.

Continue reading “Bank robbery in Cyprus; depositors set to have up to 10% of funds seized”

GoldMoney Reduces Fees

Storage fees for gold stored at all VIA MAT vaults will be reduced by a third to 0.12% per annum.

Storage fees for silver stored with VIA MAT Switzerland will be reduces by half to 0.49% per annum or 0.39% per annum for more than 50,000 ounces of silver.

Minimum storage fee will be reduced to only 0.001 grams per month for gold, platinum and palladium, and 0.001 ounces per month for silver.

The changes, beginning in April, also include a reduction in metal-to-metal exchange fees and new bar registration & storage options.

Check out all the details here.