Bitcoin may be gaining wide acceptance as both a means of monetary exchange and investment however authorities in Canada have ruled that Bitcoin is not to be considered as legal tender.
There are two facets to Bitcoin, the crypto-currency that is gaining acclaim (and infamy) as a means of anonymously and securely moving funds with virtually no intervention from government agencies. Because Bitcoin is not rooted in any country, its value is not pegged by any central bank, which makes it an ideal instrument for speculation. Additionally, Bitcoin can be used as a medium of monetary exchange — usually with rising or falling value, depending on the exchange rate.
Bitcoin comes with both advantages and disadvantages. Among the pros are fast transactions and minimal fees (if any). Bitcoin, however, suffers from high volatility (its value can shoot up or crash in a matter of days or even hours). Plus, it is not yet widely accepted everywhere, although both online and offline merchants have started accepting Bitcoin as payment for goods and services.
Perhaps one sign that Bitcoin may be rising in legitimacy is the willingness of establishments and institutions to accept the crypto-currency as a means of exchange. In the recent months, schools, retailers, and even professional sports teams have accepted Bitcoin as a means of payment. But the currency might gain with recognition from governments or at least monetary authorities.
In the US, there is debate as to the viability of Bitcoin as a currency, although monetary authorities have started taking a deeper look into virtual currencies, which “may hold long term promise.” In a congressional hearing in November last year, Bitcoin, along with other virtual currencies, have been considered “legitimate financial services.”
Unfortunately, this is not the case in Canada, where the finance authorities have already deemed Bitcoin to be “not legal tender” at this time. “Only Canadian bank notes and coins are recognized as legal tender in Canada,” an offiical from the country’s finance department wrote in a statement. “Bitcoin digital ‘currency’ is not legal tender in Canada.”
There is a difference, of course, to being a “legal tender” to offering an instrument for “legitimate financial service”. There is question, however, whether the Canadian government will start licensing or regulating services that offer Bitcoin exchange with other currencies. But Bitcoin use might be promising in Canada: it is here where Bitcoin ATMs first started to be installed. Additionally, Bitcoin usage tracker site CoinMap says the country has about 100 businesses that accept the virtual currency.
Source: Wall Street Journal