Is virtual currency popularity built on Banking inefficiency?

The exploding popularity of Bitcoins and other crypto currency is a matter of concern and intrigue for all economists.

One of the USPs of the Bitcoins for example is the ability to move it from one holder to another holder in about 10 to 15 minutes while international Bank transfers may take longer time.

Also Bank transfers are often revoked several days after the recipient is notified of the receipt while Bitcoin transfer is irrevocable. There have been many frauds committed only on account of “Chargebacks” and revocation of payment orders.

The other advantage of the use of Bitcoins for payments is the absence of transfer charges as against the exorbitant charges collected by Banks.

Lack of central authority or peer to peer nature that is under the control of politicians is said to be another positive feature of the cryptocurrency systems

If economists therefore are envious of the popularity of Bitcoins and are afraid of its power to destabilize the monetary regulations, there is perhaps a need to look at some monetary reforms that take away the consumer advantages enjoyed by cryptocoins.

Perhaps the “Mintchips” concept of the Canadian Government  is an attempt in this direction which other monetary authorities may take a serious look at.

Naavi

Related Articles:

Experts clash over Crypto currency

Bitcoin attracts attention of mainstream investors and Regulators

Canadian Royal to test Mint chip payment systems

About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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