Attitude of politicians and banking community to digital currencies shifts
Opposition to Bitcoin and peer-to-peer decentralised currency has faded over the last year, according to reports. This report highlights how US presidential candidates Rand Paul and Rick Perry have both voiced support for digital currencies, while in the UK Prime Minister David Cameron has endorsed a 'Fintech Manifesto', and even the Chinese government seems to have given up on efforts to control Bitcoin.&nbsp;
When new technology comes along, history shows us that it is usually polarizing in some way. Enthusiasts often make grandiose claims for the future and see everything as proof of the inevitability of the concept. On the other hand, ever since the time of the Luddites, those that stood to lose out with the march of progress have opposed change. That is quite natural; people’s opinions are colored by their economic interest. One of the surprising things about Bitcoin and the idea of a decentralized peer to peer currency in general, however, is how quickly the opposition seems to have faded.

When I started out writing on the subject, just a year or so ago, opposition from major finance houses, governments and even random individuals was everywhere. There were several internet comment names that trolled anything Bitcoin relentlessly, but they seem to have given up recently. Politicians of all stripes were vehemently opposed to the idea, even though very few had even a basic understanding of the concept, and bankers warned us that it was all a scam and had no future.

Now, vocal opposition is rare. That the bankers, who in theory have most to lose from the widespread adoption of Bitcoin, have changed tack is hardly surprising. They may have most to lose financially, but they recognize that once the cat is out of the bag, there is a lot to gain from co-opting the mechanics of digital currency rather than trying to convince people that it is doomed to failure. Increased adoption, the realization that Bitcoin is a tradable entity and a deeper understanding of what it actually is have all made that the more common path for financial institutions. What is far more surprising in a way is that governments and politicians are beginning to accept the idea.

The issuance of money and the control of its supply is one of the things that give governments power, so when politicians even pay lip service to the idea of a peer to peer currency that is by nature outside of their control it is notable. Rand Paul’s Libertarian background and leanings make it unsurprising that he accepts Bitcoin for campaign contributions, but others seem to be jumping on board. There was further evidence that that is happening this week when another Republican Presidential candidate, Rick Perry, stated that he was in favor of “regulatory breathing room” for digital currencies.

Of course, without specific policies relating to the field, that means little. It could well be all a part of Perry’s attempts to brand himself as an intellectual and have no more significance that the glasses he has taken to wearing. What it might do, though, is make government policy towards Bitcoin a part of the discussion during election season, if for no other reason than his opponents viewing his support as a weakness. Whatever the reason though, if the subject is raised, the increased awareness that that would bring would be a welcome development.

It is not just here in America that politicians’ attitudes to Bitcoin appear to be softening. The U.K. Prime Minister David Cameron has just announced a "Fintech Manifesto" that aims to place the country at the forefront of developments in financial technology. He even went so far as to include the wallet provider Blockchain in a recent trade delegation. Even the Chinese government seem to have, at least for now, given up trying to ban or control Bitcoin. That is not exactly an endorsement, but it does point to an increasing feeling that some kind of progress towards digital currency is inevitable.

Although many in the Bitcoin community will see government interest as a bad thing by definition, that is not necessarily the case. Decentralized peer to peer currencies are by nature untamable, so the downside to interest from politicians seems limited. The upside, however, of greater exposure and even a regulatory framework that increases trust without placing an undue burden could be huge. For now supporters of Bitcoin should welcome the attention from politicians, and look forward to the prospect, albeit remote, of a question on the subject during a debate. If nothing else the answers could be amusing!

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.