Support for the appropriate regulation of bitcoin announced at the G7 summit in June

Support for an appropriate regulation of virtual currencies was announced at the Group of Seven (G7) summit which was help in Germany in June with the UK present as one if the representative.

Along with the UK Prime Minister, David Cameron at the G7, which was held in Bavaria back on the 7th to the 8th June 2015, were heads of state from the largest economic countries in the world including Germany, Italy, US, Japan, Canada and France.

One of the major concerns that was raised in the summit statement by the G7 group was the use of digital currency like bitcoin to finance terrorist group under the cloak of anonymity and this kind of activity was something it was looking to oversee. The regulation of emerging methods of payment would be part of this process according to the statement which read “We will take further actions to ensure greater transparency of all financial flows, including through an appropriate regulation of virtual currencies and other new payment methods.”

A recommendation was made by the Financial Action Task Force (FATF) that all digital currency exchanges be monitored and before being allowed to operate would be required to hold a license to operate. This recommendation was fully supported by the G7 group in one of its pledges and in terms of efforts to both deploy and develop the various oversight standards in which the group said it would be actively contributing.

According to the group “We will strive to ensure an effective implementation of FATF standards, including through a robust followup process.”

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It isn’t easy to figure out exactly what motivates people to use unregulated cryptocurrency like bitcoin or what type of person they are although a bitcoin study has recently been released that tries to elaborate on just who these people are. Based on the various article regarding bitcoin users it may come as no surprise to many that according to data from this report distinct link have been made between bitcoin use, illegal activity and computer programmers.

To look at the reasons for people’s interest in bitcoin and its use data from Google Trends has had to be used by the authors of this bitcoin study from the University of Kentucky and this is mainly due to the fact that users of bitcoin have their anonymity protected as is standard with cryptocurrency. This data along with anecdotal evidence and a variety of other existing research has helped to build up a picture of the types of people that are the most likely to take an interest in bitcoin although it has confirmed that the trends data alone would not be enough to provide definitive proof.

Until now research has concluded that profit making, politics or just sheer curiosity have been the driving forces for people looking at bitcoin and other cryptocurrency and on this basis the research has found four possible groups of users, which are investors, lovers of technology, criminals and those with anti-establishment views.

Google Trends was used to look into the various search terms using the word ‘bitcoin’ over the 31 months that this study was conducted. It was initially concluded that social censoring of the Google data would be unlikely even though some activities carried out with bitcoin would have been quite sensitive. The study also concluded that there was a strong link between exchange prices and searches related to bitcoin on Google which reflected on the people that were either closely following bitcoin or actually had an involvement in its use.

In order to separate out the types of bitcoin users the bitcoin study took searches that related to the computer science discipline along with various terms like ‘bitcoin exchange’, ‘bitcoin mining’, ‘bitcoin value and ‘bitcoins’. This set out the tech lover group as bitcoin users.

To look at the interest relating to investors, the libertarian political group and criminal activity it looked at search terms that consisted of ‘free market’, ‘make money’ and of course ‘silk road’.

Although it was no surprise that the Google Trends data confirmed that computer programmers and criminals were the primary types to use bitcoin what was surprise was that no direct links could be found for investors looking to profit from bitcoin or just those looking to separate themselves from the mainstream banking system.

The authors of the bitcoin study wrote “Although many commentators have speculated about motives for using Bitcoin, our study is the first to systematically analyse Bitcoin interest, including the interest of hard-to-observe clientele. We find robust evidence that computer programming enthusiasts and illegal activity drive interest in Bitcoin and find limited or no support for political and investment motives.”